The misuse of alcohol is estimated to result in enormous economic costs, composed largely of reduced labor market productivity. However, there has been debate on this issue. The purpose of this paper is to help to resolve this debate by presenting sound structural estimates of the relationship between measures of problem drinking and of employment and unemployment. The analysis is based on the 1988 Alcohol Supplement of the National Health Interview Survey. We find that for both men and women, problem drinking results in reduced employment and increased unemployment.