BY: DHAVAL DAVE
Graduate Center CUNY
Department of Economics
National Bureau of Economic Research (NBER)
ROBERT KAESTNER
University of Illinois at Chicago
Institute of Government and Public Affairs
National Bureau of Economic Research (NBER), at New
York
Document: Available from the SSRN Electronic Paper Collection:
http://papers.ssrn.com/paper.taf?abstract_id=288475
Paper ID: NBER Working Paper No. W8562
Date: October 2001
Contact: ROBERT KAESTNER
Email: Mailto:kaestner at uic.edu
Postal: University of Illinois at Chicago
Institute of Government and Public Affairs
815 West Van Buren Street, Suite 525
Chicago, IL 60607 USA
Phone: 312-996-8227
Co-Auth: DHAVAL DAVE
Email: not available
Postal: Graduate Center CUNY
Department of Economics
Graduate Center
New York, NY 10036 USA
ABSTRACT:
In this paper, we present estimates of the effect of alcohol
taxes on employment, hours of work per week, and wages. These
are reduced form estimates derived from a structural model
linking alcohol use to labor market outcomes. The reduced form
estimates are meaningful in two ways: first, they provide
estimates of the effect of an important public policy tool,
alcohol taxes, on labor market outcomes, and second, they can be
used to evaluate hypotheses about the structural effects of
alcohol use on labor market outcomes. The results of the
analysis suggest that alcohol taxes are unrelated to employment,
hours of work, and wages. Estimates of the effect of alcohol
taxes on labor market outcomes were large and imprecise, and
characterized by significant variation in sign and magnitude
across samples and types of alcohol taxes. This suggests that
there is a weak and indeterminate relationship between alcohol
taxes and labor market outcomes. This finding implies that
alcohol use does not adversely affect labor market outcomes and
is inconsistent with findings from previous studies.