18 or 21: The Economic Implications of the Minimum Legal Drinking Age in the United States

Open Access
Crowley, Aly G.
Area of Honors:
Bachelor of Science
Document Type:
Thesis Supervisors:
  • Russell Paul Chuderewicz, Thesis Supervisor
  • David Shapiro, Honors Advisor
  • minimum legal drinking age
This paper will provide an economic analysis of the implications of lowering the minimum legal drinking age from 21 to 18. The minimum legal drinking age (MLDA) has long been a point of contention in American society as both economists and politicians alike vet their ideas for the optimal MLDA. Given the fact that the United States is only one of a few developed nations to enforce a 21 year old MLDA, people who oppose the current system argue that 18 year old MLDA models established in other developed nations, such as those in the European Union (EU) have resulted in better social outcomes, such as lower levels of excessive or “binge” drinking. Another point of debate surrounds externalities, or the negative costs that one imposes on others through their actions, which include the risk of being exposed to drunk drivers. Furthermore, since the minimum enlistment age for the U.S. military as well as the legal voting age is 18, those in favor of a lower MLDA argue that our laws should consistently reflect the idea that 18 years old represents the age of adult maturity in the United States. Moreover, given the budget crises that we have faced recently, enfranchising 18-20 year olds with the ability to drink legally may lead to an increase in alcohol consumption, which could boost government tax-revenue. Simultaneously, an age-18 MLDA would also reduce enforcement costs of the 21 year-old MLDA. Thus, the research problem that this paper will attempt to address is whether lowering the MLDA from 21 to 18 makes sense from an economic perspective. Specifically, a cost-benefit analysis that quantitatively analyzes the effect of lowering the MLDA will be presented. Rather than dive into both the costs and benefits of a potentially lower MLDA, this paper will assess the increase in both private and social costs as a result of allowing the 18-20 year old age group legal access to alcohol. The conclusion of the paper will illustrate that, although we cannot make any concrete determinations, the economic analyses overwhelmingly favor maintaining the current 21 year-old MLDA.