The effect of alcohol consumption on the earnings of older workers

This study analyses the effects of alcohol consumption on the labour market outcomes of older individuals. The data set used consists of five waves of the Health and Retirement Study. The results from models with a limited number of covariates indicate that there is a wage and earnings premium associated with alcohol use. This premium progressively diminishes as more individual-level controls are added to the standard earnings function. The data set is longitudinal which allows for estimation of individual-fixed-effects specifications. These results indicate that alcohol use does not have a positive effect on earnings and wages.