does bread have alcohol in it?

The majority of the alcohol evaporates during baking.

McGee's On Food and Cooking says (pg 532):

In making beer and wine, the carbon dioxide escapes from the fermenting liquid, and alcohol accumulates. In making bread both carbon dioxide and alcohol are trapped by the dough, and both are expelled from the dough by the heat of baking.

I also found this report, which states that some alcohol (0.04 to 1.9%) may remain.

However, the report is from 1926, so
1. it may not be really representing modern day situation
2. the data, methodology etc. is not reported: it looks more like an informal news than a real research article, so I cannot critique on whether the results are realistic.

All yeast fermented products contain ethyl alcohol (ethanol). Yeast produces carbon dioxide and ethanol as it metabolizes sugar. Generally, the longer the fermentation the greater amount of alcohol. Sourdough starters for instance are allowed to ferment for a long time and can form a clear liquid on top called "hooch." Hooch can reach upwards of 15%-18% alcohol by volume.

As far as the alcohol burning off, this report given by the Dept. of Agriculture shows alcohol content vs. heat and time in baking/cooking. The remaining alcohol in bread is usually negligible, but if you cut open a hot loaf you can usually smell the trace remaining.

The basis of yeast cookery is that yeasts react with sugar to produce carbon dioxide, which aerates the dough but also produces - as a by-product - alcohol (ethanol). During heating of the dough loss of alcohol will occur - down to vanishly small amounts but not complete absence. If you are concerned about total absence of alcohol, you need to look at bread-making by different methods, for example using baking powder or just direct heat.

Following recent comments, you’re right that it is a physical process, not a chemical one, but it is one that is progressive. The dough will contain a mixture of water and alcohol. As baking proceeds, the components of this mixture will evaporate at a rate influenced by the volatility of each, and their proportions in the mixture. I would expect the proportion of alcohol in the vapour to be greater than in the liquid mixture, due to its volatility. However, this will reduce the concentration of alcohol in the remaining mixture, and this will lead to a progressive reduction in the rate of alcohol loss, giving the half-life effect. The following link has a report from the USDA about alcohol burn-off in cooking in general http://homecooking.about.com/library/archive/blalcohol12.htm

Yeast has many phases. In an oxygenated environment the yeast will produce carbon dioxide and water and it will reproduce, there is no alcohol. While doing this it consumes the oxygen. Once oxygen is depleted it becomes anaerobic and a completely different process takes over. It will then produce alcohol and carbon dioxide. This is called fermentation and it it only occurs in an anaerobic environment (or if there is some fatty acids present). It takes a long time for the fermentation phase to begin. It simply won't have a chance to occur in bread.

Yes. That's why the smell of baking bread is so intoxicating/addictive; the airborne trace alcohol goes straight through the mucus membranes in your nose into your bloodstream to your brain - think sniffing aerosolized vodka....

In some countries commercial bakeries have been required to filter the output of their air handlers to prevent "contamination" of the air inside and outside the bakery. So, no more baking bread aroma near the bakery. :-(