We're not in dreamland anymore: The consequences of community opioid use on local industrial composition

Abstract

We estimate the effect of opioid use rates on local economic resilience through changes in industrial composition. We find regional opioid use rates adversely affect firm growth in general, with the greatest impact on small firms. Our results are robust to several identification strategies (Difference in Differences, Propensity Score Matching, and Instrumental Variables) and alternative empirical specifications. Our findings establish that local industrial composition and long‐term resilience are each adversely affected by the opioid public health crisis.