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Opioids and the Labor Market

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  • Dionissi Aliprantis
  • Kyle Fee
  • Mark E. Schweitzer

Abstract

This paper studies the relationship between local opioid prescription rates and labor market outcomes. We improve the joint measurement of labor market outcomes and prescription rates in the rural areas where nearly 30 percent of the US population lives. We find that increasing the local prescription rate by 10 percent decreases the prime-age employment rate by 0.50 percentage points for men and 0.17 percentage points for women. This effect is larger for white men with less than a BA (0.70 percentage points) and largest for minority men with less than a BA (1.01 percentage points). Geography is an obstacle to giving a causal interpretation to these results, especially since they were estimated in the midst of a large recession and recovery that generated considerable cross-sectional variation in local economic performance. We show that our results are not sensitive to most approaches to controlling for places experiencing either contemporaneous labor market shocks or persistently weak labor market conditions. We also present evidence on reverse causality, finding that a short-term unemployment shock did not increase the share of people abusing prescription opioids. Our estimates imply that prescription opioids can account for 44 percent of the realized national decrease in men's labor force participation between 2001 and 2015

Suggested Citation

  • Dionissi Aliprantis & Kyle Fee & Mark E. Schweitzer, 2019. "Opioids and the Labor Market," Working Papers 201807R, Federal Reserve Bank of Cleveland.
  • Handle: RePEc:fip:fedcwq:180701
    DOI: 10.26509/frbc-wp-201807r
    Note: Revision of Working Paper 1807, first published in May 2018.
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    File URL: https://doi.org/10.26509/frbc-wp-201807r
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    References listed on IDEAS

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    Cited by:

    1. 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.
    2. Ruhm, Christopher J., 2019. "Drivers of the fatal drug epidemic," Journal of Health Economics, Elsevier, vol. 64(C), pages 25-42.
    3. 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.
    4. Sujeong Park & David Powell, 2020. "Is the Rise in Illicit Opioids Affecting Labor Supply and Disability Claiming Rates?," NBER Working Papers 27804, National Bureau of Economic Research, Inc.
    5. Cornelius A. Rietveld & Pankaj C. Patel, 0. "Prescription opioids and new business establishments," Small Business Economics, Springer, vol. 0, pages 1-25.

    More about this item

    Keywords

    Labor Force Participation; Opioid Abuse; Great Recession; Opioid Prescription Rate;

    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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