Opioids and the Labor Market

RePEc Short ID: pal244
ORCID iD: 0000-0002-7013-9353

Aliprantis, Dionissi; Fee, Kyle; Schweitzer, Mark E.

doi:10.26509/frbc-wp-201807r

Working Paper

Opioids and the Labor Market

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

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

JEL Classification: I10; J22; J28; R12;

https://doi.org/10.26509/frbc-wp-201807r