Analysis of Relationship Between Alcohol Consumption and People’s Unemployment

Abstract

This paper examines the correlation between unemployment in the labor market and individual consumption of alcohol. It uses the data from the National Longitudinal Survey of Youth (NLSY). It includes information on labor market results, alcohol consumption, and assorted individuals' demographics every two years in 1989 and 1994. The data are restricted to young adults between the ages of 24 and 32 in 1989 (and hence 29-32 in 1994). Each person has a unique identifier (variables named id), and the year is represented by the specified variable. The variable names of these data use STATA software for data processing and variable analysis. The standardized data were used to analyze the main components of years, including 1989 and 1994. The PCA method needs to evaluate the Eigenvalue of the result, which reflects the degree to which the main component affects the original variable. And KMO is used to measure the strength of the correlation between variables by comparing the correlation coefficients of the variables with the coefficients of bias correlation. By analyzing these variables' data, the number of days in the last month the individual has at least 1 drink is significant with the unemployment rate. One interesting phenomenon in other possible variables is the impact of the number of years of education the individual's father has on the unemployment rate is not significant in 1989, but the dad's education back to significant variables list.