Does Alcohol Consumption Reduce Human Capital Accumulation? Evidence from the College Alcohol Study, by Williams J, Powell LM, Wechsler H. Applied Economics 2003: 35, 1227-1239.
Reprinted with permission form Taylor & Francis Group.
It is often conjectured that a significant cost of youthful drinking is the future labour market consequences of having accumulated a lower stock of human capital. While several studies have investigated the effect of youthful drinking on the quantity of human capital stock accumulated, measured by years of education completed or high-school graduation, this paper investigates the effect of alcohol consumption on the quality of human capital stock accumulated as measured by college students’ GPA. Using data from the Harvard School of Public Health’s College Alcohol Study, the indirect effect of the quantity of alcohol consumed on GPA is estimated through hours spent studying as well as the direct effect. Results show that the net total effect of alcohol consumption on GPA is negative for the sample of college students, and that the main effect is via a reduction in the hours spent studying. This finding confirms that high levels of alcohol consumption have an overall negative consequence for academic achievement, and hence future labour market outcomes.
Journal Article (PDF – 140KB)