Both social causation and health-related selection may influence educational gradients in alcohol use in adolescence and young adulthood. The social causation theory implies that the social environment (e.g. at school) influences adolescents’ drinking behaviour. Conversely, the health-related selection hypothesis posits that alcohol use (along other health-related characteristics) predicts lower educational attainment. From past studies it is unclear which of these mechanisms predominates, as drinking may be both a cause and consequence of low educational attainment. Furthermore, educational gradients in alcohol use may reflect the impact of ‘third variables’ already present in childhood, such as parental socioeconomic status (SES), effortful control, and IQ. We investigated social causation and health-related selection in the development of educational gradients in alcohol use from adolescence to young adulthood in a selective educational system. We used data from a Dutch population-based cohort (TRAILS Study; n = 2,229), including measurements of educational level and drinking at ages around 14, 16, 19, 22, and 26 years (waves 2 to 6). First, we evaluated the directionality in longitudinal associations between education and drinking with cross-lagged panel models, with and without adjusting for pre-existing individual differences using fixed effects. Second, we assessed the role of childhood characteristics around age 11 (wave 1), i.e. IQ, effortful control, and parental SES, both as confounders in these associations, and as predictors of educational level and drinking around age 14 (wave 2). In fixed effects models, lower education around age 14 predicted increases in drinking around 16. From age 19 onward, we found a tendency towards opposite associations, with higher education predicting increases in alcohol use. Alcohol use was not associated with subsequent changes in education. Childhood characteristics strongly predicted education around age 14 and, to a lesser extent, early drinking. We mainly found evidence for the social causation theory in early adolescence, when lower education predicted increases in subsequent alcohol use. We found no evidence in support of the health-related selection hypothesis with respect to alcohol use. By determining initial educational level, childhood characteristics also predict subsequent trajectories in alcohol use.