Better social drinkers don’t earn more

Alcohol-tolerant men in East Asia don’t financially benefit over their intolerant colleagues

Abstract

A large fraction of people in East Asia is incapable of digesting alcohol because of a genetic deficiency. This study examines whether the variation in alcohol tolerance contributes to inequality in the labor market. We conduct our original surveys in Japan, Taiwan, and Korea with the measurement of respondents’ degree of alcohol tolerance by a bio-marker test. We find that alcohol-tolerant men consume significantly more alcohol, but their earnings and hours worked do not differ from those of alcohol-intolerant men. Despite a prevalent view that drinking alcohol is indispensable to establishing good relationships with colleagues and business partners, our results suggest that there is no systematic impact of alcohol tolerance on labor market outcomes.

Main content

Have you ever felt pressured to join an afterwork drinking party, even if you’re more inclined to having some tea than getting tipsy? In East Asia, drinking with your colleagues is traditionally seen as an almost essential part of the working culture. Drinking parties are used to build trust, get closer to your boss or subordinates, and discuss topics more candidly than in the workplace. However, a joint study between researchers in Japan, Taiwan and South Korea appears to show that those who drink more don’t necessarily reap extra financial benefits at work, compared to those who drink less.

“We found no justification for drinking for the purpose of improving labor market outcomes,” said Professor Daiji Kawaguchi, an economist from the Graduate School of Public Policy at the University of Tokyo. “Despite the widespread perception that drinking is important for business communication in East Asia, we did not find evidence supporting the idea. Health research has already found that there is no benefit of heavy alcohol consumption in terms of improving health outcomes, so I think this is important knowledge for when a person decides to drink or not.”

The team surveyed working men aged 25 to 59 years old with a list of 45 questions, including ones on health, drinking habits, finances and weekly working hours. Respondents also self-checked their alcohol tolerance using a simple stick-on alcohol patch test. In total, about 3,500 men from across the three regions participated. The researchers were particularly interested in Asian men not only because of the work-related drinking culture, but also because of alcohol flush, or “Asian flush,” syndrome (AFS), which causes people’s faces to turn red while they also quickly experience headaches, sickness and other symptoms due to a genetic inability to digest alcohol.

“We wanted to find out if a wage premium existed for those with a higher alcohol tolerance,” explained Kawaguchi. “Although our results showed that alcohol-tolerant men do drink more often and more each time than alcohol-intolerant men, there was no significant difference across the three populations in terms of working hours or earnings between them.” About 52% of the respondents in Japan and Taiwan and about 60% in South Korea were alcohol intolerant, which the researchers say is in line with figures reported in medical literature.

A limitation of the study was that the South Korean sample size was smaller (around 500 people, compared to 1,000 from Taiwan and 2,000 from Japan), restricted to the capital city of Seoul, and included a disproportionate number of college-educated respondents (92%) compared to the national educational average. “We would like to do a similar analysis again,” said Kawaguchi, “but next time with a much larger data set and in collaboration with other specialists, to look in more detail at genome bank data and alcohol digestive ability in combination with socioeconomic outcomes.”

With a general trend in young people from high-income countries towards drinking less — which in 2022 led Japan’s National Tax Agency to even encourage the country’s youth to drink more (due to declining tax revenues) — this result will hopefully come as good news that you don’t have to get drinking to get ahead. “I enjoy social drinking despite my intolerance to alcohol,” Kawaguchi said. “However, no one should be pressured to drink.”

 

Paper title

Daiji Kawaguchi, Jungmin Lee, Ming-Jen Lin, Izumi Yokoyama. Is Asian Flushing Syndrome a Disadvantage in the Labor Market? Health Economics. DOI: 10.1002/hec.4675

https://onlinelibrary.wiley.com/doi/10.1002/hec.4675

Funding

This research was supported by the Japan Science and Technology Agency (JST) and the Society for the Promotion of Science (JSPS), grant number 16K13369. Lee’s work was supported by the Ministry of Education of the Republic of Korea and the National Research Foundation of Korea (NRF-2020S1A3A2A02104190).

Research contact

Professor Daiji Kawaguchi
Graduate School of Public Policy, The University of Tokyo
Hongo 7-3-1, Bunkyo-ku, Tokyo 113-0033
Email: kawaguchi@e.u-tokyo.ac.jp
Tel.: +81 (0)3 5841 5508