The drinkers' bonus in the military: officers versus enlisted personnel

Bethany Peters

Applied Economics, 2009, vol. 41, issue 17, pages 2211-2220

Abstract: Applied Economics published the first article reporting the findings of drinkers earning more than nondrinkers in 1988. The positive correlation between drinking and higher wages has existed in the economics literature on alcohol consumption for almost two decades. However, a clear explanation for this finding is only beginning to emerge. I use data on male military personnel from the 1985 Worldwide Survey of Alcohol and Nonmedical Drug Use Among Military Personnel to explore a theory of social capital. Specifically, one way individuals can invest in social capital is through drinking in certain settings. Abstainers miss out on opportunities to increase their social capital stock because they forego social interaction that could result in promotion. Some evidence comes from exploring the wage bonus for Officers versus Enlisted. I find the effect of different drinking levels on wages varies with station in the military. Officers who drink between two and 38 drinks per week earn between 2 and 8% more than Officers who abstain. Alternatively, enlisted personnel gain a much smaller bonus from drinking, which is consistent with the ways in which the military differs on Officers and Enlisted promotions, thus supporting evidence for social capital as a wage-enhancing drinking mechanism.

Date: 2009

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