Opioids and the Labor Market

Abstract

This paper studies the relationship between local opioid prescription rates and labor market outcomes for prime-age men and women between 2006 and 2016. We estimate the relationship at the most disaggregated level feasible in the American Community Survey in order to provide estimates that include rural areas that have, in some cases, seen particularly high prescription rates. Given the limited time period, it is particularly important to account for geographic variation in both short-term and long-term economic conditions. We estimate three panel models to control for evolving local economic conditions: a difference-indifferences specification, a specification with specific controls for economic conditions, and a model that focuses on a comparison group of place with similar performance in 2000. These modelling approaches find a range of statistically significant and economically substantial results for both prime-age men and women. For example, we find that a 10 percent higher local prescription rate is associated with a decrease in the prime-age labor force participation rate of between 0.15 and 0.47 percentage points for men and between 0.15 and 0.19 percentage points for women, depending on the control strategy. We also estimate effects for narrower demographic groups and find substantially larger estimates for some groups, notably for white and minority men with less than a BA. We also present evidence on reverse causality. We show that a short-term unemployment shock did not increase the share of people misusing prescription opioids and that prescription levels vary substantially within quintiles of longer-term labor market performance. Our estimates are generally robust to estimation within those quintiles of 2000 labor market performance. These results argue against theories of reverse causation that rely on prescriptions rates being higher in labor markets that were already weaker.

Fiscal Impacts of the Opioid Crisis on State and Local Governments

“…For all the reasons discussed above, it is difficult to interpret the association between growth in opioid overdose deaths and tax receipts just presented as causal. however, together with evidence from other studies that opioid use is associated with lower labor force participation rates (Aliprantis, Fee, and Schweitzer 2019;Deiana and Giua 2018;harris et al 2020;Park and Powell 2020), the results in Figure 1 provide a reason to believe that the opioid crisis has reduced the revenue-raising capacity of state and local governments.…”

“…There is evidence that OUDs increase the health care needs of individuals and their family members (Reinhart et al 2018), reduce labor force participation rates (Aliprantis, Fee, and Schweitzer 2019; Deiana and Giua 2018; Harris et al 2020; Park and Powell 2021), negatively affect the ability to meet family needs such as the care of children (Buckles, Evans, and Lieber 2020; Evans, Lieber, and Power 2019; Gihleb, Giuntella, and Zhang 2019), and increase involvement in criminal activity (Bondurant, Lindo, and Swensen 2018; Dave, Deza, and Horn 2018; Wen, Hockenberry, and Cummings 2017). If these effects on individuals are widespread enough, they may significantly affect the need for state and local government expenditures on Medicaid and health services, income maintenance programs, child protection services, and police and criminal justice services.…”

The Effects of Prescription Drug Monitoring Programs on Labor Market Activity and Credit Outcomes

“…They find that a 10 percent increase in prescriptions causes a 0.56 percentage point reduction in labor force participation. Aliprantis et al (2019) also find declines in labor force participation in high prescription counties using differences in differences and using a control group of counties with…”

Food Insecurity and the Opioid Crisis

“…The opioid crisis in the U.S. has disrupted families (Caudillo, Villarreal, and Cohen, this volume; Chapman, this volume; Bullinger, Wang, and Feder, this volume) and decreased labor force participation (Harris et al 2020; Aliprantis, Fee, and Schweitzer 2019; Cheung, Marchand, and Mark, this volume), both factors that are independently associated with food insecurity (Coleman-Jensen et al 2021). This analysis focuses less on the opioid users themselves and the negative consequences of opioid use for user’s family relations, economic stability, and health.…”