Can technology help to reduce underage drinking? Evidence from the false ID laws with scanner provision

Underage drinkers often use false identification to purchase alcohol or gain access into bars. In recent years, several states have introduced laws that provide incentives to retailers and bar owners who use electronic scanners to ensure that the customer is 21 years or older and uses a valid identification to purchase alcohol. This paper provides the first comprehensive analysis of the effects of these laws using confidential data from the National Longitudinal Survey of Youth, 1997 Cohort (NLSY97). Using a difference-in-differences methodology, I find that the false ID laws with scanner provision significantly reduce underage drinking, particularly in the short-run. The impact of these laws are more pronounced for 16 and 17 year olds. For this group, I find that these laws reduce the probability of engaging in binge drinking up to 12 percentage points. These results are robust to alternative model specifications and imply that stricter false ID laws may significantly reduce underage alcohol consumption.