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Is the rise in illicit opioids affecting labor supply and disability claiming rates?

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  • Park, Sujeong
  • Powell, David

Abstract

This paper examines how the recent transition of the opioid crisis from prescription opioids to more prevalent misuse of illicit opioids, such as heroin and fentanyl, altered labor supply behavior and disability insurance claiming rates. We exploit differential geographic exposure to the reformulation of OxyContin, the largest reduction in access to abusable prescription opioids to date, to study the effects of substitution to illicit markets. We observe meaningful reductions in labor supply measured in terms of employment-to-population ratios, hours worked, and earnings in states more exposed to reformulation relative to those less exposed. We also find evidence of increases in disability applications and beneficiaries.

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  • Park, Sujeong & Powell, David, 2021. "Is the rise in illicit opioids affecting labor supply and disability claiming rates?," Journal of Health Economics, Elsevier, vol. 76(C).
    • Handle: RePEc:eee:jhecon:v:76:y:2021:i:c:s0167629621000151
    DOI: 10.1016/j.jhealeco.2021.102430
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    Cited by:

    1. Philip Armour & Rosanna Smart & Elliott Brennan, 2021. "The Causes and Consequences of Opioid Use among Older Americans: A Panel Survey Approach," Working Papers wp419, University of Michigan, Michigan Retirement Research Center.
    2. David Cho & Daniel I. García & Joshua Montes & Alison E. Weingarden, 2021. "Labor Market Effects of the Oxycodone-Heroin Epidemic," Finance and Economics Discussion Series 2021-025, Board of Governors of the Federal Reserve System (U.S.).
    3. Andrei Barbos & Minglu Sun, 2021. "The effect of awarding disability benefits on opioid consumption," Health Economics, John Wiley & Sons, Ltd., vol. 30(11), pages 2794-2807, November.
    4. Jakub Lonsky & Isabel Ruiz & Carlos Vargas-Silva, 2022. "Trade Networks, Heroin Markets, and the Labor Market Outcomes of Vietnam Veterans," Working Papers 202203, University of Liverpool, Department of Economics.
    5. Chowdhury, Sulin, 2023. "Prescription Limiting Laws Effects on Opioid Misuse in the United States," 2023 Annual Meeting, July 23-25, Washington D.C. 335457, Agricultural and Applied Economics Association.
    6. Robert Bifulco & Iuliia Shybalkina, 2022. "Fiscal Impacts of the Opioid Crisis on State and Local Governments," The ANNALS of the American Academy of Political and Social Science, , vol. 703(1), pages 324-349, September.
    7. Brendon McConnell, 2023. "What's Logs Got to do With it: On the Perils of log Dependent Variables and Difference-in-Differences," Papers 2308.00167, arXiv.org, revised Aug 2023.
    8. Kaestner, Robert & Ziedan, Engy, 2023. "Effects of prescription opioids on employment, earnings, marriage, disability and mortality: Evidence from state opioid control policies," Labour Economics, Elsevier, vol. 82(C).
    9. David Cho & Alvaro Mezza & Joshua Montes, 2022. "Choices and Implications when Measuring the Local Supply of Prescription Opioids," Finance and Economics Discussion Series 2022-078, Board of Governors of the Federal Reserve System (U.S.).
    10. Carolina Arteaga Cabrales & Victoria Barone, 2021. "The Opioid Epidemic: Causes and Consequences," Working Papers tecipa-698, University of Toronto, Department of Economics.
    11. Sim, Yongbo, 2023. "The effect of opioids on crime: Evidence from the introduction of OxyContin," International Review of Law and Economics, Elsevier, vol. 74(C).
    12. Bhashkar Mazumder, 2023. "The Effects of Prescription Drug Monitoring Programs on Labor Market Activity and Credit Outcomes," Working Paper Series WP 2023-13, Federal Reserve Bank of Chicago.
    13. Carolina Arteaga & Victoria Barone, 2023. "Democracy and The Opioid Epidemic," Working Papers tecipa-765, University of Toronto, Department of Economics.
    14. Lonsky, Jakub & Ruiz, Isabel & Vargas-Silva, Carlos, 2022. "Trade networks, heroin markets, and the labor market outcomes of Vietnam veterans," Labour Economics, Elsevier, vol. 78(C).
    15. Johanna Catherine Maclean & Justine Mallatt & Christopher J. Ruhm & Kosali Simon, 2022. "The Opioid Crisis, Health, Healthcare, and Crime: A Review of Quasi-Experimental Economic Studies," The ANNALS of the American Academy of Political and Social Science, , vol. 703(1), pages 15-49, September.
    16. Martin Andersen & Johanna Catherine Maclean & Michael F. Pesko & Kosali Simon, 2023. "Does paid sick leave encourage staying at home? Evidence from the United States during a pandemic," Health Economics, John Wiley & Sons, Ltd., vol. 32(6), pages 1256-1283, June.
    17. Sumit Agarwal & Wenli Li & Raluca Roman & Nonna Sorokina, 2023. "The Opioid Epidemic and Consumer Credit Supply: Evidence from Credit Cards," Working Papers 23-28, Federal Reserve Bank of Philadelphia.

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    More about this item

    Keywords

    OxyContin reformulation; Fentanyl; Worker health; Disability incidence;
    All these keywords.

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior

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