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Opioids and the Labor Market

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  • Dionissi Aliprantis
  • Mark E. Schweitzer

Abstract

This paper finds evidence that opioid availability decreases labor force participation while a large labor market shock does not influence the share of opioid abusers. We first identify the effect of availability on participation using the geographic variation in opioid prescription rates. We use a combination of the American Community Survey (ACS) and Centers for Disease Control and Prevention (CDC) county-level prescription data to examine labor market patterns across both rural and metropolitan areas of the United States from 2007 to 2016. Individuals in areas with higher prescription rates are less likely to participate after accounting for standard demographic factors and regional controls. This relationship remains significant for important demographic groups when increasingly strong panel data controls, including a full set of geographic fixed effects and measures of local labor market conditions in 2000, are introduced to the regressions. We also investigate the possibility of reverse causality, using the Great Recession as an instrument to identify the effect of weak labor demand on opioid abuse. The share abusing opioids did not increase after the onset of the Great Recession. The evidence on the frequency of abuse is more ambiguous since the identified increases could be the continuation of a pre-trend.

Suggested Citation

  • Dionissi Aliprantis & Mark E. Schweitzer, 2018. "Opioids and the Labor Market," Working Papers (Old Series) 1807, Federal Reserve Bank of Cleveland.
  • Handle: RePEc:fip:fedcwp:1807
    DOI: 10.26509/frbc-wp-201807
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    Cited by:

    1. David Cho & Daniel I. Garcia & 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. Joyce Manchester & Riley Sullivan, 2019. "Exploring causes of and responses to the opioid epidemic in New England," New England Public Policy Center Policy Reports 19-2, Federal Reserve Bank of Boston.
    3. 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).
    4. Cornelius A. Rietveld & Pankaj C. Patel, 0. "Prescription opioids and new business establishments," Small Business Economics, Springer, vol. 0, pages 1-25.
    5. Carolina Arteaga Cabrales & Victoria Barone, 2021. "The Opioid Epidemic: Causes and Consequences," Working Papers tecipa-698, University of Toronto, Department of Economics.
    6. Francisco Perez-Arce & Maria J. Prados & Tarra Kohli, 2018. "The Decline in the U.S. Labor Force Participation Rate," Working Papers wp385, University of Michigan, Michigan Retirement Research Center.
    7. Ruhm, Christopher J., 2019. "Drivers of the fatal drug epidemic," Journal of Health Economics, Elsevier, vol. 64(C), pages 25-42.

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    More about this item

    Keywords

    Opioid Prescription Rate; Labor Force Participation; Great Recession; Opioid Abuse;
    All these keywords.

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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