Association for Public Policy Analysis & Management

This paper examines the effects of teen drinking on educational attainment. By using the qusai-experimental setting in South Korea, I demonstrate that underage drinking does not have the adverse effect on the ultimate level of education. Two different policies- minimum legal drinking age (MLDA) and school attendance law which accepts the student at the younger than stipulated age-allows us to identify the true peer effect on the decision to drink as well as the effect of alcohol consumption on educational outcomes.

This study first empirically examines the peer effect on young adults’ drinking behavior. I use the data from the Korean Labor and Income Panel Study (KLIPS) to evaluate the strength of peer group influences on the consumption of alcohol by young adults. MLDA in South Korea depends on the individuals’ birth year rather than the birthday. The legal access to alcohol is allowed from the 1st day of the year an individual becomes 19 no matter their actual day of birth. The MLDA further complicated by the school attendance law. The school attendance cutoff is in March, resulting in children born in January and February going to school with children nearly a year older than themselves. The combination of these two laws results in a peer group with both drinking eligible and drinking ineligible members. I use Regression Discontinuity (RD) method to show the prevalence of underage drinking among the group whose members have eligible drinking peers. By comparing the drinking incidence between individuals with different eligibility to drink, I find that having a peer who has legal access to alcohol leads to an increase in alcohol consumption among the people who are not eligible to drink.

Using the two-sample instrumental variables (TSIV) procedure, I report the estimates of the effect of teen drinking on educational attainment. I include Youth Panel data for the second stage analysis. The estimate results indicate that there may be small effects on early dropout behavior. However, the impact of drinking on the ultimate level of education fades away as shown by dropout behaviors measured at older ages. Even with the statistically significant effect of drinking on immediate dropout, the final level of education is not affected by drinking at the age of 18. The years of education measured at age 30 also not affected by youthful drinking. Thus, I conclude that the one-year early exposure to drinking culture which results in higher level of alcohol consumption among drinking ineligible group does not have a significant impact on educational attainment. This result can be a contribution to the literature where the youthful use of alcohol is believed to inhibit the accumulation of schooling.