The impact of alcohol consumption and marijuana use on high school graduation.

In this study we use data from the National Longitudinal Survey of Youth (NLSY) to estimate the relationship between high school graduation, and alcohol and marijuana use among high school students. We also estimate the demand determinants for each of these substances. Our results show that there are significant adverse effects of alcohol and marijuana use on high school graduation. In particular, increases in the incidence of frequent drinking, liquor and wine consumption, and frequent marijuana use, significantly reduce the probability of high school graduation. Our results also show that beer taxes, liquor prices and marijuana decriminalization have a significant impact on the demand for these substances. These findings have important policy implications. A ten percent increase in beer taxes, reduces alcohol consumption among high school students, which in turn raises the probability of high school graduation by about three percent. A 1 percent increase in liquor prices raises the probability of high school graduation by over 1 percent. Raising the minimum drinking age for liquor also reduces liquor and wine consumption, and thus, improves the probability of high school graduation. Although the relationship between marijuana decriminalization and marijuana use is not significant, decriminalization is found to reduce the probability of becoming a frequent drinker. This result suggests that marijuana use and frequent drinking are substitute activities. Illicit substance abuse reduces the rate of high school completion, reduces expected future earnings and creates potential health problems. Thus, high-school-based preventive programs which discourage alcohol consumption and marijuana use are highly recommended, in order to alleviate these problems.