from Panel Data"
BY: ERDAL TEKIN
Georgia State University
Department of Economics
Institute for the Study of Labor (IZA)
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Paper ID: IZA Discussion Paper No. 432
Date: February 2002
Contact: ERDAL TEKIN
Email: Mailto:tekin at gsu.edu
Postal: Georgia State University
Department of Economics
Andrew Young School of Policy Studies
University Plaza
Atlanta, GA 30303 USA
Phone: (404) 651-3968
Fax: (404) 651-4985
Paper Requests:
Contact: Mark Fallak, Institute for the Study of Labor (IZA),
P.O. Box 7240, D-53072 Bonn, Germany. Phone:+49-228-3894-0 ext.
223. Fax:+ 49-228-3894-510. Mailto:Fallak at iza.org
ABSTRACT:
This paper examines the effects of alcohol consumption on
employment and wages for males and females in Russia. Both cross
sectional and fixed-effects models are estimated utilizing data
from the Russia Longitudinal Monitoring Survey. The results from
the models that do not control for unobserved heterogeneity
indicate that alcohol consumption has a positive impact on
employment and wages. Further, there is some evidence in favor
of an inverse U-shaped relationship between alcohol consumption
and the labor market outcomes. Once the unobserved heterogeneity
is controlled for using fixed effects, the positive association
diminishes for the employment models for males and females. For
the wage models, controlling for unobserved heterogeneity
strengthens the positive impact of alcohol consumption both in
significance and magnitude for males, while the reverse is true
for females. However, the inverse U-shaped relationship obtained
in cross-sectional models no longer exists. The results
underline that unobserved heterogeneity plays an important role
on the relationship between alcohol consumption and labor market
behavior for both males and females. The findings are robust to
model specifications and various alcohol consumption measures.
Keywords: Employment, Wages, Alcohol Consumption, Russia