Labor Market Effects of the Oxycodone-Heroin Epidemic

41 Pages Posted: 17 May 2022

See all articles by David Cho

David Cho

Government of the United States of America - Division of Research and Statistics

Daniel Garcia

Board of Governors of the Federal Reserve System

Joshua Montes

Board of Governors of the Federal Reserve System

Alison Weingarden

OECD Centre for Entrepreneurship

Date Written: April, 2021

Abstract

We estimate the causal effects of heroin use on labor market outcomes by proxying for heroin use with prior exposure to oxycodone, the largest of the prescription opioids with a well-documented history of abuse. After a nationwide tightening in the supply of oxycodone in 2010, states with greater prior exposure to oxycodone experienced much larger increases in heroin use and mortality. We find increases in heroin use led to declines in employment and labor force participation rates, particularly for white, young, and less educated groups, consistent with the profile of oxycodone misusers. The results show the importance of extending beyond prescriptions when accounting for the labor market effects of the opioid crisis.

Keywords: Labor force, Participation rate, Opioid crisis

JEL Classification: I12, I18, J21

Suggested Citation

Cho, David and Garcia, Daniel and Montes, Joshua and Weingarden, Alison, Labor Market Effects of the Oxycodone-Heroin Epidemic (April, 2021). FEDS Working Paper No. 2021-25, Available at SSRN: https://ssrn.com/abstract=4108361 or http://dx.doi.org/10.17016/FEDS.2021.025

David Cho (Contact Author)

Government of the United States of America - Division of Research and Statistics ( email )

20th and C Streets, NW
Washington, DC 20551
United States

HOME PAGE: http://https://www.federalreserve.gov/econres/david-cho.htm

Daniel Garcia

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

Joshua Montes

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

Alison Weingarden

OECD Centre for Entrepreneurship ( email )

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