No Booze? You May Lose: Why Drinkers Earn More Money than Nondrinkers

Journal of Labor Research Vol. 27, No. 3, 2006

Reason Foundation Policy Brief No. 44

20 Pages Posted: 10 Sep 2010

See all articles by Bethany L. Peters

Bethany L. Peters

Rhodes College

Edward Peter Stringham

Trinity College; American Institute for Economic Research

Date Written: September 1, 2006

Abstract

A number of theorists assume that drinking has harmful economic effects, but data show that drinking and earnings are positively correlated. We hypothesize that drinking leads to higher earnings by increasing social capital. If drinkers have larger social networks, their earnings should increase. Examining the General Social Survey, we find that self-reported drinkers earn 10-14 percent more than abstainers, which replicates results from other data sets. We then attempt to differentiate between social and nonsocial drinking by comparing the earnings of those who frequent bars at least once per month and those who do not. We find that males who frequent bars at least once per month earn an additional 7 percent on top of the 10 percent drinkers’ premium. These results suggest that social drinking leads to increased social capital.

Suggested Citation

Peters, Bethany L. and Stringham, Edward Peter, No Booze? You May Lose: Why Drinkers Earn More Money than Nondrinkers (September 1, 2006). Journal of Labor Research Vol. 27, No. 3, 2006, Reason Foundation Policy Brief No. 44, Available at SSRN: https://ssrn.com/abstract=1674457

Bethany L. Peters

Rhodes College ( email )

2000 N. Parkway
Memphis, TN 38112
United States

Edward Peter Stringham (Contact Author)

Trinity College ( email )

Hartford, CT 06106
United States

American Institute for Economic Research ( email )

PO Box 1000
Great Barrington, MA 01230
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
324
Abstract Views
3,952
rank
115,610
PlumX Metrics