Does Marijuana Legalization Affect Work Capacity?

Evidence from Workers' Compensation Benefits

Published in: National Bureau of Economic Research, Working Paper 28471 (2021). doi: 10.3386/w28471

Posted on RAND.org on March 23, 2021

by Rahi Abouk, Keshar M. Ghimire, Johanna C. MacLean, David Powell

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We study the effect of state recreational marijuana laws (RMLs) on workers' compensation (WC) benefit receipt among adults 40–62 years. We find that WC receipt declines in response to RML adoption both in terms of the propensity to receive benefits and benefit amount. We estimate complementary declines in non-traumatic workplace injury rates and the incidence of work-limiting disabilities. We offer evidence that the primary driver of these reductions is an improvement in work capacity, likely due to access to an additional form of pain management therapy.

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