The Effect of Alcohol Consumption on Earnings

18 Pages Posted: 17 Mar 2003


The effect of alcohol consumption on the earnings of full-time male workers is analysed using the Australian National Health Survey 1989-90. A multinomial logit choice model is used to explain workers' choice of drinking status and to correct for selection bias in the earnings equation estimation. It is found that moderate drinking leads to a significant earnings premium relative to abstention and heavy drinking. The results are consistent with moderate drinking improving individual's health and hence productivity and earnings.

Suggested Citation

Barrett, Garry F., The Effect of Alcohol Consumption on Earnings. Economic Record, Vol. 78, pp. 79-96, 2002, Available at SSRN:

Garry F. Barrett (Contact Author)

University of Sydney ( email )

Rm 370 Merewether (H04)
The University of Sydney
Sydney, NSW 2006 2008

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