Alcohol use and the labor market in Uruguay

This paper is one of only a few studies to examine potential labor market consequences of heavy or abusive drinking in Latin America and the first to focus on Uruguay. We analyzed data from a Uruguayan household survey conducted in 2006 using propensity score matching methods and controlling for a number of socio-demographic, family, regional, behavioral health, and labor market characteristics. As expected, we found a positive association between heavy drinking and absenteeism, particularly for female employees. Counter to the findings for developed countries, our results revealed a positive relationship between heavy drinking and labor force participation or employment. This result was mostly driven by men and weakened when considering more severe measures of abusive drinking. Possible explanations for these findings are that employment leads to greater alcohol use through an income effect, that the Uruguayan labor market rewards heavy drinking, or that labor market characteristics typical of less developed countries, such as elevated safety risks or job instability, lead to problem drinking. Future research with panel data should explore these possible mechanisms.