Alcohol prohibition, social environment and learning: Evidence from India

We study the effects of alcohol prohibition on children’s learning outcomes. We exploit a plausibly exogenous change in the availability of alcohol in the Indian state of Bihar, which implemented a state-wide ban on the manufacturing, sale, transport and consumption of alcohol. Using a difference-in-differences framework, we find that the ban reduced alcohol consumption and improved learning outcomes of school-going children in Bihar. The results are plausibly driven by improvements in the child’s social environment—lower neighborhood crime and lower domestic violence—induced by the alcohol ban.