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The Effect of Illicit Drug Use on the Wages of Young Adults

Robert Kaestner ()

Journal of Labor Economics, 1991, vol. 9, issue 4, 381-412

Abstract: This article examines the effects of cocaine and marijuana use on the wages of young adults. The endogeneity of drug use in a wage equation is considered and a two-stage least squares procedure is implemented. The results suggest that increased use of marijuana or cocaine is associated with higher wages. The positive relationship between drug use and the wage does not diminish with age. The author also investigates whether systematic differences in the return to measures of human capital investments can explain the positive relationship between drug use and wages. Copyright 1991 by University of Chicago Press.

Date: 1991
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