This paper examines how the unemployment rate is related to adolescent alcohol use and experience of binge drinking during a time period characterized by big societal changes. The paper uses repeated cross-sectional adolescent survey data from a Swedish region, collected in 1988, 1991, 1995, 1998, 2002 and 2005, and merges this with data on local unemployment rates for the same time periods. Individual level frequency of alcohol use as well as experience of binge drinking is connected to local level unemployment rate to estimate the relationship using multilevel modeling. The model includes municipality effects controlling for time-invariant differences between municipalities as well as year fixed effects controlling for municipality-invariant changes over time in alcohol use. The results show that the unemployment rate is negatively associated with adolescents’ alcohol use and the experience of binge drinking. When the unemployment rate increases, more adolescents do not drink at all. Regular drinking (twice per month or more) is, on the other hand, unrelated to the unemployment rate. Examining gender-differences in the relationship, it is shown that the results are driven by behavior in girls, whereas drinking among boys does not show any significant relationship with changes in the unemployment rate.