The association of alcohol dependency with employment probability: evidence from the population survey 'Health 2000 in Finland'

Abstract

In this paper, we investigate to what extent alcohol-dependent individuals fare worse in the Finnish labour market, using data from a large Finnish health survey. We used the DSM-IV criteria for alcohol dependence assessed by a composite international diagnostic interview (CIDI). We find that there are substantial disadvantages for alcohol-dependent men and women in the labour market, in the sense that they have lower employment probabilities. Treating alcohol dependence as an exogenous variable, we find that alcohol dependence is associated with decrease in the probability of full-time or part-time work of around 14 percentage points for men and 11 percentage points for women. However, accounting for endogeneity increases the negative effect to some 50 percentage points for men and to some 40 percentage points for women.