The supply of opioid prescriptions is a strong predictor of declines in work-force participation, according to a new study, which also found that weak employment conditions themselves didn’t lead to more opioid abuse.
The study by two Federal Reserve Bank of Cleveland economists found that people in areas with higher opioid prescription rates are less likely to participate in the labor force, and have lower employment rates. Yet the share of people abusing opioids didn’t increase because of the last recession.
For men of prime working age—between 25 and 54 years old—the labor force participation rate was 4.9 percentage points lower in a high prescription area than in a low prescription area, the paper by Cleveland Fed economists Dionissi Aliprantis and Mark Schweitzer said.
Women also worked less in areas where opioid prescriptions were more common, but not to the same degree, with a 1.4 percentage point lower labor force participation rate than in a low-prescription area.
The impact is starker for those without college degrees. For men with a high-school diploma or less, participation was 7.4 percentage points lower in areas where medical practitioners are prescribing more opioids.
The Cleveland Fed paper adds to literature that puts the blame for the opioid crisis on the supply of drugs, rather than economic shocks like the 2007-2009 recession, in assessing the roots of an overdose epidemic that costs an estimated 115 American lives a day.
The new paper supports a study published earlier this year by University of Virginia economist Christopher Ruhm. That paper argued “the drug environment rather than economy is the key driver in rising drug fatalities,” including supply-side changes like opioid prescribing patterns in the U.S. and the introduction of new drugs such as OxyContin in 1996.
Opioids, including prescription opioids, heroin, and fentanyl, killed more than 42,000 people in 2016, more than any year on record, according to the Centers for Disease Control and Prevention. Those deaths helped drive a decline in U.S. life expectancy in 2016 for the second year in a row — the first consecutive-year fall since the early 1960s.
The Cleveland Fed paper found the impact of the opioid crisis on regional labor markets has been “large and statistically robust,” but it also found that the share of individuals abusing opioids didn’t increase due to the 2007-2009 recession.
“Our work using the Great Recession as a shock on the labor market to identify a response in drug usage cautions against the view that improving economic conditions will solve the drug abuse problem,” the authors said. “The lack of response to such a large labor market shock suggests that the main contributors to ‘deaths of despair’ would need to be found outside the labor market.”
“Deaths of despair” is a term coined in 2015 by two Princeton economists who published a paper showing that mortality was rising for white, middle-aged Americans after decades of decline, a startling development for an economically advanced nation. Driving the uptick were increases in deaths from drugs, alcohol-related liver diseases and suicide, as well as a slowdown in progress against death in middle age from heart disease and cancer, the nation’s biggest killers, wrote Anne Case and Nobel Prize-winning economist Angus Deaton, her husband.
The economists have attributed the trend to a number of factors, but in particular “the social dysfunctions, such as loss of meaning in the interconnected worlds of work and family life, that come with prolonged economic distress.”
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from Real Time Economics https://ift.tt/2wU0cuC
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