We're Not in Dreamland Anymore: How Regional Opioid Use Rates Affect Industrial Composition

Abstract

The opioid crisis has adversely affected nearly every aspect of life in some U.S. communities. Understanding how regional opioid use rates affect firm resources, and thus the industrial landscape, is vital to understanding long-term economic and fiscal effects. In this study, I estimate the causal effect of regional opioid use rates on firm resources, and industrial composition by using high-volume opioid dispensing pharmacies (pill mills) as an instrument. I find regional opioid use rates adversely affect firms in general, with differential effects across firm size, and industry. I also find adverse impacts on labor supply, and consider long-term economic and fiscal implications. Together, these findings link public health to long-term economic vitality and fiscal capacity.

Keywords: Industrial Structure, Health and Economic Development

JEL Classification: L16, I15, O12