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Prescription Opioids and Labor Market Pains: The Effect of Schedule II Opioids on Labor Force Participation and Unemployment

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  • Harris, Matthew
  • Kessler, Lawrence
  • Murray, Matthew
  • Glenn, Beth

Abstract

We examine the effect of prescription opioids on county labor market outcomes, using data from the Prescription Drug Monitoring Programs of ten U.S. states and labor data from the Bureau of Labor Statistics. We achieve causal identofication by exploiting plausibly exogenous variation in the concentration of high-volume prescribers as instruments (using Medicare Part D prescriber data). We find strong adverse effects on labor force participation rates, employment- to-population ratios, and unemployment rates. Notably, a 10 percent increase in prescriptions causes a 0.56 percentage point reduction in labor force participation, similar to the drop attributed to the 1984 liberalization of Disability Insurance.

Suggested Citation

  • Harris, Matthew & Kessler, Lawrence & Murray, Matthew & Glenn, Beth, 2017. "Prescription Opioids and Labor Market Pains: The Effect of Schedule II Opioids on Labor Force Participation and Unemployment," MPRA Paper 86586, University Library of Munich, Germany, revised 28 Mar 2018.
    • Handle: RePEc:pra:mprapa:86586
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    Cited by:

    1. 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.).
    2. Janet Currie & Hannes Schwandt, 2021. "The Opioid Epidemic Was Not Caused by Economic Distress but by Factors That Could Be More Rapidly Addressed," The ANNALS of the American Academy of Political and Social Science, , vol. 695(1), pages 276-291, May.
    3. Aliprantis, Dionissi & Fee, Kyle & Schweitzer, Mark E., 2023. "Opioids and the labor market," Labour Economics, Elsevier, vol. 85(C).
    4. Carolina Arteaga Cabrales & Victoria Barone, 2021. "The Opioid Epidemic: Causes and Consequences," Working Papers tecipa-698, University of Toronto, Department of Economics.
    5. Claudio Deiana & Ludovica Giua & Roberto Nisticò, 2019. "The Economics Behind the Epidemic: Afghan Opium Price and Prescription Opioids in the US," CSEF Working Papers 525, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy, revised 13 May 2019.
    6. Dionissi Aliprantis & Mark E. Schweitzer, 2018. "Opioids and the Labor Market," Working Papers (Old Series) 1807, Federal Reserve Bank of Cleveland.
    7. Deiana, C. & Giua, L. & Nisticò, R., 2020. "Opium Price Shocks and Prescription Opioids in the US," Health, Econometrics and Data Group (HEDG) Working Papers 20/23, HEDG, c/o Department of Economics, University of York.
    8. Deiana Claudio & Giua Ludovica, 2021. "The Intended and Unintended Effects of Opioid Policies on Prescription Opioids and Crime," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 21(2), pages 751-792, April.
    9. 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).
    10. Albert Sumell, 2020. "Overdose Deaths and Entrepreneurial Activity," Economies, MDPI, vol. 8(1), pages 1-10, March.
    11. Cornelius A. Rietveld & Pankaj C. Patel, 0. "Prescription opioids and new business establishments," Small Business Economics, Springer, vol. 0, pages 1-25.
    12. Robert Kaestner & Engy Ziedan, 2019. "Mortality and Socioeconomic Consequences of Prescription Opioids: Evidence from State Policies," NBER Working Papers 26135, National Bureau of Economic Research, Inc.

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    Keywords

    I12; J21;

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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