Marginal Revolution: I didn't believe it at first

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I didn't believe it at first

...we conjecture that binge drinking conveys unobserved social skills that are rewarded by employers.

Here is the full and very carefully done paper. I've known for a while there is a correlation between drinking and wages, but only recently have I started thinking it might be more than a trick in the data. The effect disappears for women, once educational attainment is taken into account. So should you encourage your sons to drink, so as to learn rituals of social bonding, or is their binging simply a signal of sociability? I'll note, by the way, that I am a not very social person who also doesn't drink much, verging on not at all.

Addendum: Andrew Gelman has much more to say on the topic.

Posted by Tyler Cowen on September 24, 2006 at 06:52 PM in Data Source | Permalink

Comments

I only read the abstract, but I'd guess the authors mean that more popular males who received more party invites (and thus end up doing more binge drinking) in high school have higher wages later.

Posted by: Keith at Sep 24, 2006 8:36:01 PM

Drinking is almost certainly almost entirely on the effect side e.g. comment #1

Posted by: BillWallace at Sep 24, 2006 9:00:08 PM

two ideas: 1) those who could handle binge drinking in 10th grade without subsequently falling into problem behavior (violence, drug addiction, etc.) are simply ready to be better performers than the rest of us, who had a fall in performance somewhere along the way. put another way: on average, those who drink and screw up earlier in adolescence are less likely to do so later, when missing a year or two of high performance would affect wage outcome. binge drinking after college may be less desirable for those who did it earlier in their life, so they just get on with their profession.

2) those who survived binge drinking learned how to handle crises in their environment, from their own drinking or those around them. These skills are valuable in the workplace for thinking on one's feet. being good at lying might help too.

Posted by: anonymous at Sep 24, 2006 11:33:26 PM

I guess I'll be making big bucks in a few years then.

Posted by: Kevin Nowell at Sep 25, 2006 12:07:13 AM

anon - another plausibility argument for your #1 is that it's a bit like peacock's feathers. If they can binge drink and perform up to par, they must be really good.

Posted by: ptm at Sep 25, 2006 12:55:45 AM

Right -- it's Zahavi's "Handicap Principle" in action.

That, say, Christopher Hitchens can turn out well-compensated prose while hung-over says a lot about his intrinsic genetic capabilities (as does the fact that he has a brother, Peter, who is just as good a pundit). I couldn't possibly write anything that anyone would pay for after drinking as heavily as Hitchens does. So, Hitchens' innate talent is greater than mine, which is a useful fact to know.

Posted by: Steve Sailer at Sep 25, 2006 2:43:01 AM

maybe drinking effects social networking positivly so that they enable drinking man to get better jobs and therefore higher wages.

Posted by: benny at Sep 25, 2006 3:26:39 AM

Note that Gellman's paper is talking about another (poorly done) paper. I tear that other paper apart here and it's problems are further discussed here.

This other paper seems better at first glance. I want to read more though, to see if/how they are getting towards a causaity result, rather than a "drinking proxies for social capital" result. From the abstract, I don't think they are pointing to causality (so no policy recommendations like "free drinks for everyone at town hall").

Posted by: Tony Vallencourt at Sep 25, 2006 7:01:51 AM

Oops:

Here is the first link: http://econball.blogspot.com/2006/09/drink-to-your-success.html

Here is the second:
http://ec970socialecon.blogspot.com/2006/09/alcohol-and-income.html

(Sorry Tyler)

Posted by: Tony Vallencourt at Sep 25, 2006 7:03:17 AM

To make sure that I am reading the abstract correctly (I need to hit a library to download the full NBER paper): they are holding academic achievement, educational attainment, adult binge drinking, and job charactertistics constant. I assume that the separate effects of teen binge drinking on each are noted? Most of my reading suggests that teen binge drinking has negative effects on academics and employment; other commenters have suggested assorted reasons why the effect might obtain when comparing drinking high-performers to non-drinking high performers. Is the total effect of teen binge drinking still negative, as expected?

Posted by: Zubon at Sep 25, 2006 8:19:28 AM

A state owned venezuelan company made the want to be emplo
yees to drink.They want them to show if they are gays, so .
And dont hire them if so.They think
that alcohol mede them to show their "true" nature once without inhibitions

Posted by: S at Sep 25, 2006 8:37:04 AM

I'm wondering if we might end up seeing a somewhat similar finding about smoking. Though it is a habit that certainly manages to alienate some, a (perhaps distressingly) large number of my relationships, both personal and proffessional have been cemented over a cigarette.

I guesss I could see the net effect of smoking on income going either way, but I'd be suprised if there was no affect at all. Of course if there was a positive income correlation with smoking, I'm sure it would inspire a lot more complaints than the one with drinking. Whereas the positive effects of drinking seem to get the cultural equivalent of a winking shake-of-the-head, implying anything good could ever come of smoking is more or less completely taboo these days (which I don't necessarily think is the worst thing in the world).

Posted by: mtc at Sep 25, 2006 10:16:45 AM

Maybe the key phrase is "positive wage effects persist after controlling for achievement". Drinking when you are young would tend to lower your achievement relative your potential. In later life your wages would be affected by your potential.

Posted by: joan at Sep 25, 2006 11:29:15 AM

Smoking a pipe used to be a sign of high status in the academic world. I remember sitting in a seminar on Thomas Hobbes in the '60s when I was the only student, of about 20, not smoking a cigarette. But the professor was impressively puffing away on a pipe.

Posted by: Robert Speirs at Sep 25, 2006 2:21:12 PM

Perhaps it has to do with involvement with sports teams. Aggressive males tend to flock towards sports teams which leads to opportunities for partying. Later in life this aggression shows itself in competing for higher salaries.

Posted by: sourcreamus at Sep 25, 2006 3:33:39 PM

All else being equal, highly masculine males tend to make more money than less masculine males, at least at upper levels of education. (At lower levels, very masculine men tend to go to prison.) Binge drinking is a form of masculine competition and display, so guys who are good at it often later on get jobs like Wall Street bond trader.

Posted by: Steve Sailer at Sep 25, 2006 3:42:20 PM

I think drinking a income could go hand in hand because you may drink more
socially if you want to move your way in a corporation. This could be done
by getting in good means with bosses. I just don't think that all guys do
end up making better wages but being more socially involved.

Posted by: Jessica at Sep 26, 2006 3:36:03 PM

I was not surprised to see that drinking can make someones income go up. It seems as if a lot of business is done over a drink. There is a bond and relationship that seems to form over a drink. Many men close deals over a drink. I dont believe that all men make a better wage that drink then those who dont. But very highly waged men seem to somehow incorporate with drinking socially.

Posted by: Kendra at Sep 26, 2006 4:46:14 PM

I believe that it is not the drinking that is causing these men to make more money, but rather the social impacts. I believe that if a person did not want to drink or be around people that drank for what ever reason they could still accomplish the same goal and be just as sociable in different ways. I do believe that drinking can make some people more sociable but I also believe that is just an excuse. If someone really wanted to make more money at a job and be promoted there are other ways to go about it rather than drinking with your co workers.

Posted by: Aftin at Sep 26, 2006 9:05:02 PM

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