Photo: procsilasA coalition of college presidents has been pushing states to lower the drinking age as a way to discourage problem drinking on campuses.
But here’s one unintended consequence of teaching young people responsible drinking habits: it could make Social Security bankrupt faster.
A 2004 study by Frank Sloan and Jan Ostermann at Duke University found that heavy drinkers contribute slightly more to Social Security, through their higher average lifetime earnings, than nondrinkers do. What’s more, since alcohol abusers tend to die sooner than moderate or nondrinkers, they draw less money, over time, from the Social Security trust fund.
Their conclusion: the elimination of heavy drinking (three or more drinks a day) from each successive group of American 25-year-olds would cost the Social Security trust fund $3 billion over the cohort’s lifetime.
According to the authors:
From the vantage point of society as a whole, heavy drinking redistributes wealth from heavy drinkers to others. Thus, if public health programs were to succeed in reducing the rate of heavy drinking, [Social Security's] future financial status would be even worse than has been projected.
The study drives home the health cost of irresponsible drinking, but with a twist: in this case, binge drinking can have positive externalities.
On another note, one of the puzzling underlying findings in this paper is the relationship between moderate alcohol consumption and increased lifetime earnings. For men and women alike, people who report downing two or fewer drinks a day earn slightly more than teetotalers do, on average. Heavy alcohol use tends to negatively impact earnings, as you might imagine, but not as much as abstinence. Sloan and Ostermann aren’t clear on the mechanics of this relationship, but the science seems solid.
Does drinking lead to higher earnings, or vice versa?
and 
. You can also watch it on 
Drink up, everyone. Apparently it’s the new lottery!
Heavy drinking lower social inhibitions, which leads to more networking. And larger social networks lead people to more and better jobs and, in at least some professions, improve productivity.
(Being able to drink with a client will in most cases improve the relationship, which means more sales.)
What about externalities associated with heavy drinking.
If college students can’t handle drinking responsibly, what makes anyone think high school students can?
Seems like these college presidents just want to hand down their problem to high-school principals. Maybe these college presidents should start earning their higher average salaries and deal with the problem themselves.
The college presidents aren’t passing on the problem to high school principals. If the drinking age is lowered to 18, most students will still be of college age. The college presidents want to be able to focus on the important issues re: drinking – moderating consumption, ensuring student safety, encouraging developing responsible attitudes towards alcohol – rather than attempting to police illegal activity by 3/4 of a campus and control the activity by the remaining students.
Maybe social drinkers (esp. if they drink outside the home) need to earn more to “feed the monkey”. Non-drinkers bank more & can retire early!
I’m going to hazard a guess at strong collinearity between risk-taking and drinking in predicting earnings and that risk taking can lead to higher wealth. Also those with wealth have less fear of risk to begin with(they’ll be fine even if they mess up a few times), so drinking is not a big deal for them.