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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.

Suggested Citation

  • 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. Lonsky, Jakub & Ruiz, Isabel & Vargas-Silva, Carlos, 2021. "Trade Networks, Heroin Markets, and the Labor Market Outcomes of Vietnam Veterans," GLO Discussion Paper Series 974, Global Labor Organization (GLO).
    3. 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.).
    4. 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.
    5. Carolina Arteaga Cabrales & Victoria Barone, 2021. "The Opioid Epidemic: Causes and Consequences," Working Papers tecipa-698, University of Toronto, Department of Economics.
    6. 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).

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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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