Opioids and Post-COVID Labor-Force Participation

Chiocchio, Francesco; Greenwood, Jeremy; Guner, Nezih; Kopecky, Karen A.

doi:10.26509/frbc-wp-202513

Working Paper

Opioids and Post-COVID Labor-Force Participation

Abstract: At the onset of COVID-19, U.S. labor-force participation dropped by about 3 percentage points and remained below pre-pandemic levels three years later. Recovery varied across states, with slower rebounds in those more affected by the pre-pandemic opioid crisis, as measured by age-adjusted opioid overdose death rates. An event study shows that a one-standard-deviation increase in pre-COVID opioid death rates corresponds to a 0.9 percentage point decline in post-COVID labor participation. The result is not driven by differences in overall health between states. The effect of prior opioid exposure had a more significant impact on individuals without a college degree. The slow recovery in states with more opioid exposure was characterized by an increase in individuals who are not in the labor force due to disability.

JEL Classification: I12; I14; J11; J12; J21;

https://doi.org/10.26509/frbc-wp-202513