It’s a simple fact. In general, alcohol drinkers make more money. As one newspaper reported, “Who said boozers are losers? Just take a look at their paychecks.”
Women in the US who drink earn 14% more than nondrinkers. Men who drink make 10% more than abstainers. That’s according to an economic analysis in the Journal of Labor Research. Men who drink in a bar at least once a month earn an additional 7%. That’s a total of 17% more than nondrinkers.
Research was done by economist Dr. Christopher Auld. He found that Canadian men who drink alcohol earn about 10% more than do abstainers. His study controlled for age, education, occupation, region and health.
Research in several other countries also finds that those who drink earn more money. For example, men in The Netherlands who drink alcohol in moderation are likely to earn 10% more than their abstaining counterparts.
One explanation is that moderate drinking improves health, which in turn affects earnings.
Why Drinkers Make More Money
Drinking Increases Social Capital
Researchers in the Auld study tested the idea that drinking increases social capital. In turn, this leads to greater income. Social capital refers to a person’s social factors. That is, sociability factors that enable the person to reap both economic and non-economic returns from social interactions. These include such things as skills, charisma, number of friends, and so on.
There is strong evidence that social networks are important in finding jobs and earning promotions. A large number of friends-of-friends may be the most important factor in getting the best job and highest income.
Drinking is Productive
If social drinking increases social capital, which increases income, then social drinking is a productive activity.
Moderate drinkers have the strongest social networks. As social integration goes up, rates of not drinking go down. The researchers wrote “Whether abstainers choose not to be as social or whether organizers of social functions involving drinking exclude abstainers in unclear. Abstainers may prefer to interact with other abstainers or less social people. Or abstainers might not be invited to social gatherings because drinkers consider abstainers dull.”
It appears that people make more money because they drink. Research by Dr. Pinka Chatterji of Harvard and Dr. Jeffrey DeSimone of the University of South Florida shows that higher income is not leading to drinking.
That is, the larger proportion of higher income people who drink isn’t because they can afford to do so. Their research was funded by the federal government (NIAAA).
Of course, there can be too much of a good thing. The economic advantage of drinking dissappears when consumption exceeds 35 drinks per week.
- Auld, M. Wages, Alcohol Use, and Smoking. Edmonton: Inst Health Econ.
- Chatterji, P. and DeSimone, J. High School Alcohol Use and Young Adult Market Outcomes. Cambridge, MA: Nat Bur Econ Res.
- Peters, B. and Stringham, E. No Booze? You May Lose. Why Drinkers Earn More than Nondrinkers. Reason Found Pol Brief 44.