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Federal Reserve Bank of Cleveland
Working Papers
Opioids and the Labor Market
Dionissi Aliprantis
Kyle Fee
Mark E. Schweitzer
Abstract

This paper studies the relationship between local opioid prescription rates and labor market outcomes for prime-age men and women between 2006 and 2016. We estimate the relationship at the most disaggregated level feasible in the American Community Survey in order to provide estimates that include rural areas that have, in some cases, seen particularly high prescription rates. Given the limited time period, it is particularly important to account for geographic variation in both short-term and long-term economic conditions. We estimate three panel models to control for evolving local economic conditions: a difference-in-differences specification, a specification with specific controls for economic conditions, and a model that focuses on a comparison group of place with similar performance in 2000. These modelling approaches find a range of statistically significant and economically substantial results for both prime-age men and women. For example, we find that a 10 percent higher local prescription rate is associated with a decrease in the prime-age labor force participation rate of between 0.15 and 0.47 percentage points for men and between 0.15 and 0.19 percentage points for women, depending on the control strategy. We also estimate effects for narrower demographic groups and find substantially larger estimates for some groups, notably for white and minority men with less than a BA. We also present evidence on reverse causality. We show that a short-term unemployment shock did not increase the share of people misusing prescription opioids and that prescription levels vary substantially within quintiles of longer-term labor market performance. Our estimates are generally robust to estimation within those quintiles of 2000 labor market performance. These results argue against theories of reverse causation that rely on prescriptions rates being higher in labor markets that were already weaker.


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Dionissi Aliprantis & Kyle Fee & Mark E. Schweitzer, Opioids and the Labor Market, Federal Reserve Bank of Cleveland, Working Papers 180702, 15 Nov 2019.
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Note: This paper is the second revision to the paper originally published as WP 18-07 in May of 2018. The first revision was published in March of 2019
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Subject headings:
Keywords: Opioid Prescription Rate; Labor Force Participation; Great Recession; Opioid Abuse
DOI: 10.26509/frbc-wp-201807r2
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