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Cleveland Fed researchers say opioid epidemic could be large enough to have impact on labor force

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Estimates of drug usage rates suggest the opioid epidemic could be large enough to have an impact on the labor force, say Cleveland Federal Reserve researchers.

Drug overdoses now account for more deaths in the United States than traffic deaths or suicides, and most of the increase in overdose deaths since 2010 can be attributed to opioids–a class of drugs that includes both prescription pain relievers and illegal narcotics. Examining trends in drug use and overdose deaths, Federal Reserve Bank of Cleveland researchers Dionissi Aliprantis and Anne Chen say that, while their estimates of usage rates are very uncertain, they suggest that drug use could be high enough to impact the labor market.

Just how much has the opioid epidemic weakened labor market outcomes and conversely, has weak labor demand during and after the Great Recession contributed to the increase in opioid usage and overdose deaths?

“Answering these questions requires accurate information, but unfortunately, there are reasons to doubt the accuracy of the only data we have,” say the researchers.

According to Aliprantis and Chen, some of the best data on heroin use come from the National Surveys on Drug Use and Health (NSDUH). “Measuring heroin use is particularly difficult, though,” say the researchers, “and the data we have are likely to understate usage rates.”

“Kilmer et al. (2014) estimate that there were nearly 1 million Americans in the group of heavy users, rather than the 60,000 counted in the NSDUH. One million heavy users would be enough to have serious implications for the labor market, as this number represents about one half of a percent of the US civilian labor force,” say Aliprantis and Chen.

Examining disaggregated data on individual drugs, the researchers say it is worth noting that the Great Recession did not exacerbate the rate of increase in drug overdose deaths. They say the average increase in deaths in the years before the Great Recession (2000-2007) — 9 percent per year — was about the same size as the increase in the period after the Great Recession (2010-2016) — 7.5 percent per year.

The researchers also note that total overdose deaths from any opioid are occurring at a much higher rate in Fourth Federal Reserve District states – Ohio, Pennsylvania, West Virginia, and Kentucky — than the US rate.

“Knowing the appropriate policy response to the opioid epidemic requires a better understanding of the epidemic’s scope, its underlying mechanisms, and its connections to the labor market,” say Aliprantis and Chen, who plan to continue to study opioid addiction and the labor market in the Fourth District. 

Read The Opioid Epidemic and the Labor Market in full.

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