Can technology help to reduce underage drinking? Evidence from the false ID laws with scanner provision.

Underage drinkers often use false identification to purchase alcohol or gain access into bars. In recent years, several states have introduced laws that provide incentives to retailers and bar owners who use electronic scanners to ensure that the customer is 21 years or older and uses a valid identification to purchase alcohol. This paper is the first to investigate the effects of these laws using confidential data from the National Longitudinal Survey of Youth, 1997 Cohort (NLSY97). Using a difference-in-differences methodology, I find that the false ID laws with scanner provision significantly reduce underage drinking, including up to a 0.22 drink decrease in the average number of drinks consumed by underage youth per day. This effect is observed particularly in the short-run and more pronounced for non-college students and those who are relatively younger. These results are also robust under alternative model specifications. The findings of this paper highlight the importance of false ID laws in reducing alcohol consumption among underage youth.