Most people would agree that drinking impairs one’s ability to perform tasks efficiently and correctly. However, a study in 1988 found evidence of a “drinker’s bonus,” or that women and men who drank earned more than those who abstained. Philip J. Cook and Bethany Peters set out to clarify these contradicting facts. Using information from the National Longitudinal Survey of Youth(NLSY), the authors observe a drinker’s bonus in addition to drinker’s being more likely to work full time than abstainers. Believing that reverse causation is the real reason behind the drinker’s bonus, Cook and Peters do regression to test alcohol tax’s influence on participation in the work force.
The NLSY is a long term study, beginning in 1979 with 12,686 youth between the ages of 14 and 21. The study members were interviewed each year, with survey’s including questions on work hours, income and drinking. Other information such as demographics of work location and education choices was also asked for. Cook and Peters create a regression for two separate circumstances. The first uses variables that a person cannot account for such as aptitude and characteristics of family. The second uses all of the variables in the first, but also included variables that were choices made by the survey member, like education, health and work experience.
For both cases, Cook and Peters discover a drinker’s bonus. While women drinkers have a bonus of 4-6%, men drinkers still have a positive bonus, but it is lower than the women’s. In addition, the authors find that drinkers are more likely to work full time than abstainers. Females are 30-60% more likely and Men are 20-40% more likely.
Hypothesizing that drinking doesn’t cause higher income, but higher income results in more drinking (a case of reverse causation), the authors use a regression to show that higher alcohol taxes lead to higher participation in the work force. While reverse causation could be just one of many explanations for the drinker’s bonus, the theory that drinking makes people more productive is not true. Instead, alcohol should be thought of as a normal commodity, which people buy more of when there is more income.
Because everyone tells me that drinking is bad and I shouldn’t drink when working, I was surprised to find that a “drinker’s bonus” existed. Intrigued about how this could be possible, I found the Cook and Peters laid out the information clearly, point out both sides of the argument and the evidence the supported each side. I enjoyed this discussion as it allowed me to know the entire argument before proceeding to the authors own research.
The one thing I think is troublesome is the NLSY. Cook and Peters indicated that this survey was biased towards racial minorities and the poor. This disproportionate sample could influence the results. Perhaps the different racial cultures support drinking more or less. Or that people who start off as poor see alcohol as a luxury item instead of a normal commodity. In addition, questions on alcohol were only included in eight years of a 26-year study. I am not sure there would be enough information to make a complete assessment of how large or small the drinker’s bonus is.