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Parental Problem-drinking and Adult Children’s Labor Market Outcomes

Current estimates of the societal costs of alcoholism do not consider the impact of parental drinking on children. This paper analyzes the consequences of parental problem-drinking on children’s labor market outcomes in adulthood. Using the NLSY79, I show that having a problem-drinking parent is associated with longer periods out of the labor force, lengthier unemployment, and lower wages, in particular for male respondents. Increased probabilities of experiencing health problems and abusing alcohol are speculative forces behind these effects. While causality cannot be determined due to imprecise IV estimates, the paper calls for further investigation of the intergeneration costs of problem-drinking.