The Labor Supply Consequences of the Opioid Crisis

by David Powell

Download eBook for Free

FormatFile SizeNotes
PDF file 0.8 MB

Use Adobe Acrobat Reader version 10 or higher for the best experience.

An emerging literature considers the role of the opioid crisis on labor outcomes, suggesting that increased access to opioids may have led to decreased national labor supply. This paper uses the introduction of OxyContin and geographic variation in its launch to study the labor supply consequences of the opioid crisis. This geographic variation provides an opportunity to study lasting differences in labor supply across states with different exposure to the opioid crisis. This paper uses an event study framework but shows, theoretically and empirically, that a standard event study model with covariates can produce misleading evidence on both the existence of pre-existing trends and post-treatment effects. I implement a simple modification to this standard framework which permits consistent estimation. The results suggest that the opioid crisis played a meaningful role in reducing labor supply for the working-age population.

Research conducted by

This research was conducted within RAND Education and Labor.

This report is part of the RAND Corporation Working paper series. RAND working papers are intended to share researchers' latest findings and to solicit informal peer review. They have been approved for circulation by RAND but may not have been formally edited or peer reviewed.

Permission is given to duplicate this electronic document for personal use only, as long as it is unaltered and complete. Copies may not be duplicated for commercial purposes. Unauthorized posting of RAND PDFs to a non-RAND Web site is prohibited. RAND PDFs are protected under copyright law. For information on reprint and linking permissions, please visit the RAND Permissions page.

The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.