The Effects of the Opioid Crisis on Employment: Evidence from Labor Market Flows
74 Pages Posted: 18 Nov 2021 Last revised: 27 Jul 2022
Date Written: July 27, 2022
We show that the opioid crisis slows transitions to employment from unemployment and non-participation. We identify the effect of the opioid crisis from cross-state variation in triplicate prescribing regulations, which produced long-lasting reductions in opioid use by reducing the initial distribution of the blockbuster opioid OxyContin. Difference-in-differences estimates show that triplicate regulations induce unemployed and non-participating workers in triplicate states to return to employment about 10 percent faster than workers in non-triplicate states. These estimates imply a 1.1 percentage point higher level of employment in steady state.
Keywords: labor market flows; recession recovery; opioid regulation
JEL Classification: J21, E24, K32, E61, E71
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