A note on the effect of minimum drinking age laws on youth alcohol consumption

ROBERT KAESTNER [*] This study uses data from the National Longitudinal Survey of Youth to investigate the effect of minimum drinking age laws (MDALs) on youth alcohol consumption. Two considerations motivated the analysis. First, results from previous studies provide conflicting evidence of the effect of MDALs on alcohol consumption. Second, all previous studies of the effects of MDALs on alcohol consumption have failed to control for unmeasured time-varying state effects. This study addresses this latter issue by using a difference-in-differences-in-differences (DDD) methodology. The results of this study were mixed. On the one hand, a preponderance of estimates of the effect of MDALs on alcohol consumption are negative, although many are not significantly different from zero. On the other hand, estimates of the effect of MDALs differ by gender and exhibit some variation across samples and methods. In the end, I believe the estimates presented in this article are not sufficient to draw a definitive conclusion and suggest the need for additional research. (JEL 118, 112) I. INTRODUCTION Alcohol consumption is highly regulated, and one of the most stringent forms of regulation is minimum drinking age laws (MDALs), which prohibit youths from purchasing alcoholic beverages. As of 1988, all 50 U.S. states had a minimum purchase age of 21. For a country that prizes individual liberty as much as the United States, implementation of such a draconian policy requires strong justification. Indeed, passage of the Federal Uniform Drinking Age Act (Public Law 98-363) was marked by considerable controversy regarding the fairness and efficacy of such a policy (GAO, 1987). The most frequently cited and compelling evidence in support of MDALs is driving fatality data. For example, in 1984, the year in which the Federal Uniform Drinking Age Act was passed, alcohol use was involved in approximately 58% of driving fatalities among males between the ages of 18 and 20. Furthermore, alcohol-related driving fatalities are the leading cause of death among teenagers. In light of this evidence, ideological objections to alcohol prohibition were overcome, and the federal government, through the Federal Uniform Drinking Act, strongly encouraged states to pass minimum drinking age laws to reduce youth alcohol consumption and the number of driving fatalities. The consequences of raising the minimum drinking age would appear to be self-evident: increasing the minimum drinking age will reduce alcohol consumption of those persons affected by the law. Thus, it is not surprising that increases in the minimum drinking age, and passage of the Federal Uniform Drinking Age Act, occurred in the absence of much hard evidence that raising the minimum drinking age reduced youth alcohol consumption. Wagenaar (1993) reviewed the few studies published prior to passage of the law and concluded that there was only a weak relationship between minimum drinking age and youth alcohol consumption. More recent studies, however, have found stronger evidence that raising the minimum drinking age significantly reduced youth alcohol consumption. In contrast to the inconsistency that characterizes estimates of the effect of MDALs on alcohol consumption, studies of the impact of MDALs on driving fatalities are nearly unanimous in finding that higher drinking ages have reduced youth driving fa talities. The findings from these two strands of literature suggest a paradox: there is strong evidence that MDALs reduce driving fatalities, but relatively weak evidence that MDALs reduce alcohol consumption. Moreover, it is surprising to find such an inconsistency since there are few alternative mechanisms besides a reduction in alcohol consumption that can explain a reduction in driving fatalities in response to a higher minimum drinking age. The purpose of this study is to reexamine the effect of MDALs on youth alcohol consumption. This reexamination is warranted for two reasons. …