Does alcohol increase workplace accidents? It seems pretty obvious that it must. If workers are drunk on the job, they are more likely to make mistakes and injure themselves or others. But what about drinking the night before work? What effect does that have on workplace accidents? And, if we are worried about workplace accidents arising from late-night drinking, would closing bars earlier help the situation?
That is the research question addressed in this 2018 article by Nicolau Martin Bassols (Universitat Pompeu Fabra) and Judit Vall Castello (Institut D’economia de Barcelona), published in the journal Labour Economics (sorry, I don't see an ungated version online). They use data on Spain, where:
Spain is divided into 17 regions (Autonomous Communities). Each of these regions implemented the reduction in bar opening hours at some point between 1994 and 2011. Before the reform, bars in Spain were allowed to open until 6am. This was reduced to 2am–3.30am, depending on the region.
There was quite some variation in the timing of the change in bar opening hours, and it is the difference in timing that Bassols and Vall Castello exploit to estimate the effect of the change in opening hours on workplace accidents. They apply a difference-in-differences analysis, which involves comparing two differences: (1) the difference between states before the policy change; and (2) the difference between states after the policy change. Of course, it isn't quite that simple as the states adopted the policy at different times (a point I will return to later in the post).
The main data that Bassols and Vall Castello use (on bar opening hours and workplace accidents) covers the period from 1990 to 2011, which allows them to have at least four years before the policy was introduced, and at least four years after the policy was introduced, for every state except one (Catalunya, which didn't adopt the policy until the end of 2011). They also use some survey data from the Spanish Family Expenditure Survey and the Spanish Health Survey, each of which covers a shorter time period.
Looking at the workplace accident data, Bassols and Vall Castello find that:
...the coefficients that capture the impact of the policy on workplace accidents for employed individuals are all negative. Furthermore, the effect is significant for both men and women as well as individuals working in the service sector. When we focus on the total population, we can see that the reduction in bar closing hours decreased the number of working accidents in 2.62 per 100.000 employed individuals. When we compare the size of the effect with the mean of working accidents in the sample (which is 28.03 for the total population) we can see that the policy caused a reduction in workplace accidents by 9%. For woman, the policy reduced working accidents by 15% and for man by 7%. For the services sector the reduction in working accidents amounted to 11%.
However, once they control for region-specific time trends, the effects almost all go away, and:
...all the results show the similar sign but smaller magnitudes. However, only the coefficient for the construction sector is significant. Not only the coefficient is significant but the size of the effect for this sector of the economy is really big: we estimate that the reduction in bar closing hours decreased working accidents in 6.60 accidents per 100.000 workers, which implies a reduction by 18.3%.
In other words, the only coefficient of interest that was statistically significant without the region-specific time trends included in the model, is the only coefficient that is statistically significant with those trends. That doesn't strike me as particularly strong evidence for an effect of bar opening hours on workplace accidents. Bassols and Vall Castello haven't adjusted their results for multiple comparisons, so the statistical significance they report could have come up purely by chance. Also, there is a further problem with the analysis. The 'two-way fixed effects' approach that they have adopted has recently attracted a lot of criticism (which is nicely outlined in two posts on the Development Impact blog, here and here, as well as this post). The short version is that the two-way fixed effects approach is likely to lead to biased estimates of the treatment effect - in this case, it would lead to a biased estimate of the effect of bar opening hours on workplace accidents. So, even putting aside that the results are statistically insignificant, they are likely to be biased as well.
Nevertheless, Bassols and Vall Castello press on and show with their other data that:
...expenditure in bars was reduced by 13% as a result of the advancement in bar closing hours. As expected, none of the coefficients capturing the effects of the reform on other durable goods is significant...
This comparison strikes me as somewhat odd. Ok, the effect on expenditure in bars is statistically significant and negative, but why compare it with expenditure on durable goods? Why not compare it with spending on other forms of entertainment (which would be subject to similar underlying consumption trends, only differentiated by the change in bar opening hours)? While at face value the results suggest that people spent less in bars after bars started closing earlier, perhaps they were also spending less on other entertainment as well. We don't know, because we never see the comparisons. Looking at self-reported consumption of alcohol, they find that:
...the coefficients for daily and weekly consumption of wine are significant and the effects are stronger for men... The regressions for the consumption of whisky, liquor, aperitifs and mixed drinks as well as the probability of smoking are also negative but non-significant.
Again, those results are underwhelming, and could easily have arisen by chance, given that it is only wine consumption, and only for men (and not for women or overall) that is statistically significant. Finally, looking at the health data (specifically the rate of hospitalisations caused by excessive alcohol consumption), Bassols and Vall Castello find that:
...all the coefficients of the diff-diff variable are negative but not significant and that the strongest reduction in alcohol-related hospitalizations is reported again for men.
When they limit the data to weekends only, they find:
...a significant negative coefficient for men pointing towards important reductions in alcohol-related hospitalizations during the weekends as a result of the reduction in bar opening hours. More precisely, the reduction in hospitalizations for men is by 0.28 per 100.000 individuals which represents a reduction by 16.5% with respect to the mean...
Overall, I'd say that this paper provides only very weak evidence for a relationship between bar opening hours and workplace accidents. The only result that is even mildly convincing is that weekend hospitalisations fall for men, by 16.5%. Note that isn't hospitalisations resulting from workplace accidents though - it is hospitalisations overall. Also, with the bias introduced as a result of the two-way fixed effect approach, even that result should be treated with due caution. What we should take away from this is that we would need a lot more convincing evidence before we concluded that bars should close earlier in order to reduce workplace accidents.
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