IDEAS home Printed from https://ideas.repec.org/p/fip/fedcwq/180702.html
   My bibliography  Save this paper

Opioids and the Labor Market

Author

Listed:
  • Dionissi Aliprantis
  • Kyle Fee
  • Mark E. Schweitzer

Abstract

This paper quantifies the relationship between local opioid prescription rates and labor market outcomes in the United States between 2006 and 2016. To understand this relationship at the national level, we assemble a data set that allows us both to include rural areas and to estimate the relationship at a disaggregated level. We control for geographic variation in both short-term and long-term economic conditions. In our preferred specification, a 10 percent higher local prescription rate is associated with a lower prime-age labor force participation rate of 0.53 percentage points for men and 0.10 percentage points for women. We focus on measuring the impact of opioid prescriptions on labor markets, so we evaluate the robustness of our estimates to an alternative causal path, unobserved selection, and an instrumental variable from the literature.

Suggested Citation

  • Dionissi Aliprantis & Kyle Fee & Mark E. Schweitzer, 2019. "Opioids and the Labor Market," Working Papers 18-07R3, Federal Reserve Bank of Cleveland, revised 14 Jul 2022.
  • Handle: RePEc:fip:fedcwq:180702
    DOI: 10.26509/frbc-wp-201807r3
    Note: This paper is the third revision to the paper originally published as WP 18-07 in May of 2018. The first revision was published in March of 2019 and the second in November of 2019.
    as

    Download full text from publisher

    File URL: https://doi.org/10.26509/frbc-wp-201807r3
    File Function: Full text
    Download Restriction: no

    File URL: https://libkey.io/10.26509/frbc-wp-201807r3?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    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. Abby Alpert & David Powell & Rosalie Liccardo Pacula, 2018. "Supply-Side Drug Policy in the Presence of Substitutes: Evidence from the Introduction of Abuse-Deterrent Opioids," American Economic Journal: Economic Policy, American Economic Association, vol. 10(4), pages 1-35, November.
    3. Marco Di Maggio & Amir Kermani, 2016. "The Importance of Unemployment Insurance as an Automatic Stabilizer," NBER Working Papers 22625, National Bureau of Economic Research, Inc.
    4. Janet Currie & Jonas Jin & Molly Schnell, 2019. "US Employment and Opioids: Is There a Connection?☆," Research in Labor Economics, in: Health and Labor Markets, volume 47, pages 253-280, Emerald Group Publishing Limited.
    5. Bhashkar Mazumder, 2005. "Fortunate Sons: New Estimates of Intergenerational Mobility in the United States Using Social Security Earnings Data," The Review of Economics and Statistics, MIT Press, vol. 87(2), pages 235-255, May.
    6. Deiana, Claudio & Giua, Ludovica, 2018. "The US Opidemic: Prescription Opioids, Labour Market Conditions and Crime," MPRA Paper 85712, University Library of Munich, Germany.
    7. 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.
    8. Carpenter, Christopher S. & McClellan, Chandler B. & Rees, Daniel I., 2017. "Economic conditions, illicit drug use, and substance use disorders in the United States," Journal of Health Economics, Elsevier, vol. 52(C), pages 63-73.
    9. Olivier Jean Blanchard & Lawrence F. Katz, 1992. "Regional Evolutions," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 23(1), pages 1-76.
    10. Powell, David & Pacula, Rosalie Liccardo & Taylor, Erin, 2020. "How increasing medical access to opioids contributes to the opioid epidemic: Evidence from Medicare Part D," Journal of Health Economics, Elsevier, vol. 71(C).
    11. Emily Oster, 2019. "Unobservable Selection and Coefficient Stability: Theory and Evidence," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 37(2), pages 187-204, April.
    12. Molly Schnell & Janet Currie, 2018. "Addressing the Opioid Epidemic: Is There a Role for Physician Education?," American Journal of Health Economics, University of Chicago Press, vol. 4(3), pages 383-410, Summer.
    13. Andrew M. Isserman & James Westervelt, 2006. "1.5 Million Missing Numbers: Overcoming Employment Suppression in County Business Patterns Data," International Regional Science Review, , vol. 29(3), pages 311-335, July.
    14. Kerwin Kofi Charles & Erik Hurst & Mariel Schwartz, 2019. "The Transformation of Manufacturing and the Decline in US Employment," NBER Macroeconomics Annual, University of Chicago Press, vol. 33(1), pages 307-372.
    15. Janet Currie & Jonas Y. Jin & Molly Schnell, 2018. "U.S. Employment and Opioids: Is There a Connection?," NBER Working Papers 24440, National Bureau of Economic Research, Inc.
    16. Timothy J. Bartik, 1991. "Who Benefits from State and Local Economic Development Policies?," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number wbsle, November.
    17. Joshua D. Angrist & Jörn-Steffen Pischke, 2009. "Mostly Harmless Econometrics: An Empiricist's Companion," Economics Books, Princeton University Press, edition 1, number 8769.
    18. Abby Alpert & William N Evans & Ethan M J Lieber & David Powell, 2022. "Origins of the Opioid Crisis and its Enduring Impacts [Synthetic Control Methods for Comparative Case Studies: Estimating the Effect of California's Tobacco Control Program]," The Quarterly Journal of Economics, Oxford University Press, vol. 137(2), pages 1139-1179.
    19. Dasgupta, N. & Beletsky, L. & Ciccarone, D., 2018. "Opioid Crisis: No Easy Fix to Its Social and Economic Determinants," American Journal of Public Health, American Public Health Association, vol. 108(2), pages 182-186.
    20. Mark E. Schweitzer, 2017. "Manufacturing Employment Losses and the Economic Performance of the Industrial Heartland," Working Papers (Old Series) 1712, Federal Reserve Bank of Cleveland.
    21. Guido W. Imbens, 2015. "Matching Methods in Practice: Three Examples," Journal of Human Resources, University of Wisconsin Press, vol. 50(2), pages 373-419.
    22. Guido W. Imbens & Jeffrey M. Wooldridge, 2009. "Recent Developments in the Econometrics of Program Evaluation," Journal of Economic Literature, American Economic Association, vol. 47(1), pages 5-86, March.
    23. repec:eme:rlec11:s0147-912120190000047009 is not listed on IDEAS
    24. Bogdan Savych & David Neumark & Randall Lea, 2019. "Do Opioids Help Injured Workers Recover and Get Back to Work? The Impact of Opioid Prescriptions on Duration of Temporary Disability," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 58(4), pages 549-590, October.
    25. William N. Evans & Ethan M. J. Lieber & Patrick Power, 2019. "How the Reformulation of OxyContin Ignited the Heroin Epidemic," The Review of Economics and Statistics, MIT Press, vol. 101(1), pages 1-15, March.
    26. 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).
    27. Christopher J. Ruhm, 2018. "Deaths of Despair or Drug Problems?," NBER Working Papers 24188, National Bureau of Economic Research, Inc.
    28. Katharine G. Abraham & Melissa S. Kearney, 2020. "Explaining the Decline in the US Employment-to-Population Ratio: A Review of the Evidence," Journal of Economic Literature, American Economic Association, vol. 58(3), pages 585-643, September.
    29. Paul Goldsmith-Pinkham & Isaac Sorkin & Henry Swift, 2020. "Bartik Instruments: What, When, Why, and How," American Economic Review, American Economic Association, vol. 110(8), pages 2586-2624, August.
    30. William Rogers, 1994. "Regression standard errors in clustered samples," Stata Technical Bulletin, StataCorp LP, vol. 3(13).
    31. Christopher J. Ruhm, 2016. "Taking the Measure of a Fatal Drug Epidemic," NBER Working Papers 22504, National Bureau of Economic Research, Inc.
    32. 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..
    33. Ruhm, Christopher J., 2019. "Drivers of the fatal drug epidemic," Journal of Health Economics, Elsevier, vol. 64(C), pages 25-42.
    34. Thomas C. Buchmueller & Colleen Carey, 2018. "The Effect of Prescription Drug Monitoring Programs on Opioid Utilization in Medicare," American Economic Journal: Economic Policy, American Economic Association, vol. 10(1), pages 77-112, February.
    35. Jill Horwitz & Corey S. Davis & Lynn S. McClelland & Rebecca S. Fordon & Ellen Meara, 2018. "The Problem of Data Quality in Analyses of Opioid Regulation: The Case of Prescription Drug Monitoring Programs," NBER Working Papers 24947, National Bureau of Economic Research, Inc.
    36. Alan B. Krueger, 2017. "Where Have All the Workers Gone? An Inquiry into the Decline of the U.S. Labor Force Participation Rate," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 48(2 (Fall)), pages 1-87.
    37. Ruhm, Christopher J., 2015. "Recessions, healthy no more?," Journal of Health Economics, Elsevier, vol. 42(C), pages 17-28.
    38. 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.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Cohle, Zachary & Ortega, Alberto, 2023. "The effect of the opioid crisis on patenting," Journal of Economic Behavior & Organization, Elsevier, vol. 214(C), pages 493-521.
    2. 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.).
    3. Pinghui Wu, 2022. "Wage Inequality and the Rise in Labor Force Exit: The Case of US Prime-Age Men," Working Papers 22-16, Federal Reserve Bank of Boston.
    4. Jeremy Greenwood & Nezih Guner & Karen A. Kopecky, 2022. "Substance Abuse during the Pandemic: Implications for Labor-Force Participation," Economie d'Avant Garde Research Reports 35, Economie d'Avant Garde.
    5. 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.
    6. Francisco Perez‐Arce & María J. Prados, 2021. "The Decline In The U.S. Labor Force Participation Rate: A Literature Review," Journal of Economic Surveys, Wiley Blackwell, vol. 35(2), pages 615-652, April.
    7. 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).
    8. Robert Bifulco & Iuliia Shybalkina, 2022. "Fiscal Impacts of the Opioid Crisis on State and Local Governments," The ANNALS of the American Academy of Political and Social Science, , vol. 703(1), pages 324-349, September.
    9. Cornelius A. Rietveld & Pankaj C. Patel, 0. "Prescription opioids and new business establishments," Small Business Economics, Springer, vol. 0, pages 1-25.
    10. Carolina Arteaga Cabrales & Victoria Barone, 2021. "The Opioid Epidemic: Causes and Consequences," Working Papers tecipa-698, University of Toronto, Department of Economics.
    11. 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.
    12. Sim, Yongbo, 2023. "The effect of opioids on crime: Evidence from the introduction of OxyContin," International Review of Law and Economics, Elsevier, vol. 74(C).
    13. Cornelius A. Rietveld & Pankaj C. Patel, 2021. "Prescription opioids and new business establishments," Small Business Economics, Springer, vol. 57(3), pages 1175-1199, October.
    14. Ruhm, Christopher J., 2019. "Drivers of the fatal drug epidemic," Journal of Health Economics, Elsevier, vol. 64(C), pages 25-42.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Deiana, Claudio & Giua, Ludovica & Nistico, Roberto, 2019. "The Economics behind the Epidemic: Afghan Opium Price and Prescription Opioids in the US," IZA Discussion Papers 12872, Institute of Labor Economics (IZA).
    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. Ruhm, Christopher J., 2019. "Drivers of the fatal drug epidemic," Journal of Health Economics, Elsevier, vol. 64(C), pages 25-42.
    4. 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.).
    5. Claudio Deiana & Ludovica Giua & Roberto Nisticò, 2024. "Opium Price Shocks and Prescription Opioids in the USA," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 86(3), pages 449-484, June.
    6. Janet Currie & Hannes Schwandt, 2020. "The Opioid Epidemic Was Not Primarily Caused by Economic Distress But by Other Factors that Can be More Readily Addressed," Working Papers 2020-25, Princeton University. Economics Department..
    7. Daniele, Gianmarco & Le Moglie, Marco & Masera, Federico, 2023. "Pains, guns and moves: The effect of the U.S. opioid epidemic on Mexican migration," Journal of Development Economics, Elsevier, vol. 160(C).
    8. Carolina Arteaga Cabrales & Victoria Barone, 2021. "The Opioid Epidemic: Causes and Consequences," Working Papers tecipa-698, University of Toronto, Department of Economics.
    9. Buckles, Kasey & Evans, William N. & Lieber, Ethan M.J., 2023. "The drug crisis and the living arrangements of children," Journal of Health Economics, Elsevier, vol. 87(C).
    10. Ilaria Natali & Mathias Dewatripont & Victor Ginsburgh & Michel Goldman & Patrick Legros, 2023. "Prescription opioids and economic hardship in France," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 24(9), pages 1473-1504, December.
    11. Boslett, Andrew & Hill, Elaine, 2022. "Mortality during resource booms and busts," Journal of Environmental Economics and Management, Elsevier, vol. 115(C).
    12. Cotti, Chad D. & Gordanier, John M. & Ozturk, Orgul D., 2020. "The relationship of opioid prescriptions and the educational performance of children," Social Science & Medicine, Elsevier, vol. 265(C).
    13. 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).
    14. Bhashkar Mazumder, 2023. "The Effects of Prescription Drug Monitoring Programs on Labor Market Activity and Credit Outcomes," Working Paper Series WP 2023-13, Federal Reserve Bank of Chicago.
    15. Simone Balestra & Helge Liebert & Nicole Maestas & Tisamarie B. Sherry, 2021. "Behavioral Responses to Supply-Side Drug Policy During the Opioid Epidemic," NBER Working Papers 29596, National Bureau of Economic Research, Inc.
    16. Johanna Catherine Maclean & Justine Mallatt & Christopher J. Ruhm & Kosali Simon, 2022. "The Opioid Crisis, Health, Healthcare, and Crime: A Review of Quasi-Experimental Economic Studies," The ANNALS of the American Academy of Political and Social Science, , vol. 703(1), pages 15-49, September.
    17. David Beheshti, 2019. "Adverse health effects of abuse‐deterrent opioids: Evidence from the reformulation of OxyContin," Health Economics, John Wiley & Sons, Ltd., vol. 28(12), pages 1449-1461, December.
    18. Shishir Shakya & Collin Hodges, 2023. "Must‐access prescription drug monitoring programs and retail opioid sales," Contemporary Economic Policy, Western Economic Association International, vol. 41(1), pages 146-165, January.
    19. Cohle, Zachary & Ortega, Alberto, 2023. "The effect of the opioid crisis on patenting," Journal of Economic Behavior & Organization, Elsevier, vol. 214(C), pages 493-521.
    20. Christopher J. Ruhm, 2018. "Deaths of Despair or Drug Problems?," NBER Working Papers 24188, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

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

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fedcwq:180702. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: 4D Library (email available below). General contact details of provider: https://edirc.repec.org/data/frbclus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.