Can Binge Drinking Save Social Security?

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A 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?


andy whitten

18 is not a magic number. We should reduce the drinking age to 19. It makes more sense because there are many 18 year old high school students but very few 19 year old high schoolers.

Also, 19 should be the legal age for marijuana usage.

HeyTomKay

Wow...even the most intelligent bloggers are swayed by misleading news accounts and MADD. The college presidents did not call for lowering the drinking age. They called for a national debate on the issue. (http://www.amethystinitiative.org/statement/) This is a significant difference I would have expected Freakonomics to understand. Nonetheless, this is the type of debate desired.

Frank Mirer

To save social security, promote smoking. Actually, start by reducing anti-smoking efforts. It will help with medicare as well, but not medicaid.

tracy

It's even more interesting compared to another piece of information: in the Philippines, the government earns either 20 billion Philippine pesos from tobacco tax revenues a year while spending twice as much on tobacco-related healthcare. I read that around 2004. Obviously, we know the lesser of the two evils here.

Also in Korea, where the drinking age is 18, the culture there promotes binge drinking. Even in university where a lot of the males by the time they enter are probably already around 20 because of the 2-year mandatory military service, binge drinking is a common (maybe even mandatory--like military service) practice. In class in my American university, I overheard a classmate complaining of his hangover because his Korean father came over for a visit and insisted that they go drinking. Now why is Korea's drinking age still 18? I'd posit that they don't drive around in giant unstable, easy-to-topple-over SUVs.

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Eugene Jonze

Binge Drinking can happen at any age, legal or not. Changing the drinking age won't change the social stigma. Find out more at www.jonzed.com

Clyde Kahrl

Please note that they define heavy drinking as three drinks---Holy smokes--that isn't even enough to get a 200 pound man legally drunk--unless he chuggs it on an empty stomach.
We all know that large men earn more than other people. So it makes sense that people who drink more make more.
Maybe people who are more honest with the researchers make more than those who lie about their drinking habits.
It may be that those who drink 3 drinks, make more, and those who drink five die young.
Don't confuse the binge drinking issue with the drunk driving issue. Young people have always been bad drivers--but the impact of drinking on driving has always been significantly smaller for younger people than older people--even when the drinking age was lower in many states.

jz

" "It's high time we stopped acting like idiot religious moralists and lowered the drinking age to 18 like the rest of the world." "

Other countries don't have the prevalence of 16-21 year olds routinely driving cars. Drinking/driving is the problem, not religion.

Our laws came from the Dept. of Transportation to the individual states.

Kelly

Does this factor in costs associated with drinking like the cost of multiple detoxes for people who have drinking problems and are on public assistance. I work in community mental health, and I meet many people who have been to detox ten to twenty times. Also looking at automobile accidents due to drinking and costs associated with that as well.

I don't think it should really influence the decision on 18 year olds drinking or not, but it is another part of the puzzle.

Caliphilosopher

Drinking leading to higher incomes? I guess the rising level of water in Venice has led to higher prices of grain, since (if you look over the years) they are highly correlated.

Truly strange that anyone would come up with a thesis that higher drinking levels might lead to higher income. Another case of the tail wagging the dog.

Matt

It's high time we stopped acting like idiot religious moralists and lowered the drinking age to 18 like the rest of the world. Why do we have to be so stubborn?

May I remind everyone that the stupidest and worst president in recent American history is a teetotaler?

Drink up kids, don't grow up to be like Bush.

jz

It is more cost efficacious to kill people off with cigarettes than alcohol. Less $$$ shifted to care for lung cancer, COPD, and heart attacks.

jz

Costs for binge drinking, chronic alcoholism, and acute intoxication are shifted from Social Security to health care.
Specifically, we pay for auto wrecks, falls, fights, acute withdrawal, cirrhosis, alcoholic hepatitis, alcoholic ketoacidosis, alcoholic gastritis, alcoholic seizures, metabolic disorders, alcoholic drug interactions, alcoholic neuropathies, ++++++++++

Charly

I started drinking at the age of 14. When I was 16 my parents found out and started to teach me how to drink in a responsible way. By the time I went to college drinking was'nt a big deal. I was able to focus more in my studies and drink in a responible way every once in a while. I think everything has to do with education. In other countries in the world, specially in Europe, kids are taught how to drink in a responsible way. You never see kids trying to sneak into clubs or partying like animals.

I think the problem has to do with the educational system, our kids are too inmature compared to other places. That's why when you give them few drinks they'll drive and do stupid things. If they can't get alcohol they'll get drugs.

Raquel

Binge drinking linked with rebelliousness? I think it might have more to do simply with the fact that you?re in college and you at least feel as if you can do anything you want than with the fact that it?s ilegal or not. I?m from Brazil, where drinking is legal for anyone over 18, and even so I think that binge drinking is a lot more frequent in a college environment than high school.

As for the correlation between drinking and high earnings, well, I think the it probably has a lot more to do with social skills than with the stress people feel. Something that would be interesting to see is if exactly what people drank had any positive correlation with their earnings, because I?m assuming that this positive correlation between drinking and wages are most likely with black labels and russian vodkas than with more "popular" alcoholic beverages...

Juan

In Europe the drinking problems are very different. The southern Europeans traditionally drink wine and on social ocassions. The northern Europeans drink more beer and licor and have binge drinking problems.
As far a I know the alcoholism problems are the same. The type of drinking is different, but the incidence of drinking problems is the same.

Becky

Higher-paying jobs more stressful? You've got to be kidding me! Anybody who's ever been a clerk, receptionist, administrative assistant, or hospital aide would, I think, beg to differ.

Having a lot of responsibilities but no power, that's stressful. Being at the mercy of lower-level (i.e. less-skilled) managers, that's stressful.

Heavy-drinking, high-paying positions like sales? Difficult, sure. Demanding, absolutely. As stressful as customer service, retail, etc? No way.

I think the fact that people with big social networks and good social skills get paid more is far more likely to be related.

Grant

Jamie (#22)--

I dunno about rebelliousness. I drank in college because, well, it's really fun and I could afford it (both in terms of money and in terms of time). Also, there's a lot of indirect peer pressure. Everyone drinks. At least they did at my school, which was nowhere out of the ordinary. Rebelliousness may have something to do with it in high school, but virtually every one of my college friends was well acquainted with the sauce by college.

Now that I'm a grad student I have to plan much more ahead of time to get drunk, and I drink a lot less. Oh how I miss those days of coming home and starting to pound 'em on Thursday afternoon.

Dan

I believe heavy drinkers tend to be risk takers which is also a trait of extreamly high earners. A good amount of people who take sisks in their careers fail and end up paying the price for it, but those who succeed more than make up for it.

Also, I'm a firm believer that 18-21 year olds who have graduated from high school should be allowed to possess and consume alcoholic beverages with less than 6% alcohol by volume. It's hard to kill yourself on beer. It's easy on tequila.

jonathan

#16 above has it correct: drinking is a predictor of risk-taking behavior. A complete non-drinker may not take risks necessary to achieve.

The most likely causative relation is that both observations flow from a source, not that one causes the other - i.e, it's not likely that a job causes drinking but is likely that a job and drinking correlate to a cause.

jimi

God, I hope so! I'm doing everything I can to help!!!

....(hiccup).....