Alcohol, unemployment rates and advertising bans: international panel evidence, 1975-2000

This paper presents empirical evidence on the relationship between alcohol consumption and unemployment for an international panel of countries in the Organization for Economic Cooperation and Development (OECD). I find a significant negative or pro-cyclical relationship between unemployment and alcohol consumption, which agrees closely with prior estimates for the United States. This finding indicates that economic factors tend to dominate possible stress-induced changes in alcohol use. Model specifications control for non-stationary panel data and for a variety of other economic and cultural factors, including prices, income, wine sentiment, tourism, population ageing and restrictive policies pertaining to alcohol use and marketing. The effects of advertising bans are statistically insignificant or have contrary coefficient signs, while a composite index for other alcohol control policies is negative. Copyright (C) 2009 John Wiley & Sons, Ltd.