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Loss of Life and Labor Productivity: The Canadian Opioid Crisis

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  • Alexander Cheung
  • Joseph Marchand
  • Patricia Mark

Abstract

Opioids were declared a public health emergency in British Columbia, Canada, in 2016, and from that year through 2021, 29,894 Canadians lost their lives to opioid overdoses. More than two-thirds of those victims were employed in the five years prior to their deaths, and this study aims to quantify their lost productivity to the Canadian economy. We apply two human capital model variants in our analysis, projecting forward the future economic output of individuals who died from opioids, from their deaths to what would have been their eventual retirements, based on the industries in which they were employed. The total estimated productivity loss to Canada is at least $8.8 billion, with the equivalent “value of statistical life†calculations an order of magnitude higher; these are based on estimates of the amount of money that individuals would pay to avoid death. Our results challenge the notion that the opioid crisis predominantly affects unproductive members of society.

Suggested Citation

  • Alexander Cheung & Joseph Marchand & Patricia Mark, 2022. "Loss of Life and Labor Productivity: The Canadian Opioid Crisis," The ANNALS of the American Academy of Political and Social Science, , vol. 703(1), pages 303-323, September.
    • Handle: RePEc:sae:anname:v:703:y:2022:i:1:p:303-323
    DOI: 10.1177/00027162231155040
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    References listed on IDEAS

    as
    1. Hollingsworth, Alex & Ruhm, Christopher J. & Simon, Kosali, 2017. "Macroeconomic conditions and opioid abuse," Journal of Health Economics, Elsevier, vol. 56(C), pages 222-233.
    2. Antonis Targoutzidis, 2018. "Some adjustments to the human capital and the friction cost methods," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 19(9), pages 1225-1228, December.
    3. Banzhaf, H. Spencer, 2022. "The Value of Statistical Life: A Meta-Analysis of Meta-Analyses," Journal of Benefit-Cost Analysis, Cambridge University Press, vol. 13(2), pages 182-197, July.
    4. Anne Case & Angus Deaton, 2017. "Mortality and Morbidity in the 21st Century," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 48(1 (Spring), pages 397-476.
    5. Anne Case & Angua Deaton, 2015. "Rising morbidity and mortality in midlife among white non-Hispanic Americans in the 21st century," Working Papers 15078.full.pdf, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies..
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    More about this item

    Keywords

    British Columbia; Canada; human capital; labor productivity; opioids; public health emergency; value of statistical life;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • I10 - Health, Education, and Welfare - - Health - - - General
    • J17 - Labor and Demographic Economics - - Demographic Economics - - - Value of Life; Foregone Income
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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