Opioids and the Labor Market

47 Pages Posted: 15 May 2018 Last revised: 18 Nov 2019

See all articles by Dionissi Aliprantis

Dionissi Aliprantis

Federal Reserve Banks - Federal Reserve Bank of Cleveland

Kyle Fee

Federal Reserve Banks - Federal Reserve Bank of Cleveland

Mark E. Schweitzer

Federal Reserve Bank of Cleveland

Date Written: November 15, 2019

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.

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

JEL Classification: I10, J22, J28, R12

Suggested Citation

Aliprantis, Dionissi and Fee, Kyle and Schweitzer, Mark E., Opioids and the Labor Market (November 15, 2019). FRB of Cleveland Working Paper No. 18-07R2. Available at SSRN: https://ssrn.com/abstract=3179068 or http://dx.doi.org/10.2139/ssrn.3179068

Dionissi Aliprantis (Contact Author)

Federal Reserve Banks - Federal Reserve Bank of Cleveland ( email )

East 6th & Superior
Cleveland, OH 44101-1387
United States

Kyle Fee

Federal Reserve Banks - Federal Reserve Bank of Cleveland ( email )

East 6th & Superior
Cleveland, OH 44101-1387
United States

Mark E. Schweitzer

Federal Reserve Bank of Cleveland ( email )

East 6th & Superior
P.O. Box 6387
Cleveland, OH 44101-1387
United States
216-579-2014 (Phone)
216-579-3050 (Fax)

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