The Effect of Alcohol Consumption on Earnings : Evidence from Vietnam

This paper investigates the relationship between household alcohol consumption and personal income in Vietnam from 2010 to 2018. Specifically, we examine whether this relationship is more pronounced among males, who tend to be more frequent drinkers. Utilizing the Heckman selection model, we analyze pooled individual-level data from the Vietnam Household Living Standard Surveys to address selection bias in the dataset. After controlling for personal and household characteristics, our findings reveal that household alcohol use is associated with a reduction of approximately 0.8% in the monthly earnings of all household members. Moreover, we observe that men experience a more severe income penalty compared to women, while the effect does not significantly differ between rural and urban areas. Additionally, education, experience, and health status are found to significantly influence personal income. Our results underscore the need for stronger policies aimed at mitigating alcohol use in Vietnam, as it not only impacts people's health but also has adverse effects on income