Abstract:
The social environment inherent in schools impacts both alcohol consumption onset and high school completion. The results reported here, based on data from the 1979–96 NLSY panels, show that the social coincidences between alcohol consumption and education are important determinants of both education completion and alcohol onset. Ignoring the social nature of these simultaneous decisions underestimates the impact of alcohol onset on education. After correcting for the presence of an endogenous positive relationship between schooling and alcohol consumption, we find that alcohol initiation before age 14 significantly reduces the probability of timeously completing high school by between 7% and 22%.
