IDEAS home Printed from https://ideas.repec.org/p/zbw/cegedp/353.html
   My bibliography  Save this paper

Illicit drugs and the decline of the middle class

Author

Listed:
  • Grossmann, Volker
  • Strulik, Holger

Abstract

Empirical evidence for the U.S. suggests that the consumption of intoxicants increases in association with the socio-economic deprivation of the middle-class. To explore the underlying mechanisms, we set up a task-based labor market model with endogenous mental health status and a health care system. The decline of tasks that were historically performed by the middle class and the associated decline in relative wages and socio-economic status increases the share of mentally ill middle class workers. Mentally ill workers can mitigate their hardships by the intake of illicit drugs or by consuming health goods. We argue that explaining the drug epidemic of the U.S. middle class requires an interaction of socio-economic decline and falling opioid prices. One factor in isolation is typically insufficient. Our analysis also points to a central role of the health care system. In our model, extending mental health care could motivate the mentally ill to abstain from illicit drug consumption.

Suggested Citation

  • Grossmann, Volker & Strulik, Holger, 2018. "Illicit drugs and the decline of the middle class," Center for European, Governance and Economic Development Research Discussion Papers 353, University of Goettingen, Department of Economics.
  • Handle: RePEc:zbw:cegedp:353
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/181446/1/1029326452.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. David H. Autor & David Dorn & Gordon H. Hanson, 2013. "The China Syndrome: Local Labor Market Effects of Import Competition in the United States," American Economic Review, American Economic Association, vol. 103(6), pages 2121-2168, October.
    2. David H. Autor & David Dorn & Gordon H. Hanson & Jae Song, 2014. "Trade Adjustment: Worker-Level Evidence," The Quarterly Journal of Economics, Oxford University Press, vol. 129(4), pages 1799-1860.
    3. Italo Colantone & Rosario Crinò & Laura Ogliari, 2015. "The Hidden Cost of Globalization: Import Competition and Mental Distress," BAFFI CAREFIN Working Papers 1511, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    4. Christopher J. Ruhm, 2018. "Deaths of Despair or Drug Problems?," NBER Working Papers 24188, National Bureau of Economic Research, Inc.
    5. Pickett, Kate E. & Wilkinson, Richard G., 2015. "Income inequality and health: A causal review," Social Science & Medicine, Elsevier, vol. 128(C), pages 316-326.
    6. Reiss, Franziska, 2013. "Socioeconomic inequalities and mental health problems in children and adolescents: A systematic review," Social Science & Medicine, Elsevier, vol. 90(C), pages 24-31.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Socio-economic deprivation; Intoxicants; Health insurance; Mental health; Middle class;

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health

    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:zbw:cegedp:353. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - Leibniz Information Centre for Economics). General contact details of provider: http://edirc.repec.org/data/cdgoede.html .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.