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How the opioid epidemic has affected the U.S. labor force, county-by-county

Fred Dews

In 2016, Princeton economist Alan Krueger made headlines with a shocking finding that nearly half of prime age men (or men ages 25 to 54) who are not in the labor force take pain medication on a daily basis. Two-thirds of those men—or about 2 million—take prescription pain medication on a daily basis.

This fall, Krueger has published a follow-up to that research, taking an even closer look at the labor force implications of the opioid epidemic on a local and national level. The new paper and data, published in the Fall 2017 edition of the Brookings Papers on Economic Activity, makes a strong case for looking at the opioid epidemic as one driver of declining labor force participation rates.

In fact, Krueger suggests that the increase in opioid prescriptions from 1999 to 2015 could account for about 20 percent of the observed decline in men’s labor force participation during that same period, and 25 percent of the observed decline in women’s labor force participation.

The labor force participation rate—the proportion of people employed or looking for work in the U.S.—has been declining since the early 2000s, reaching a near 40-year low of 62.4 percent in September 2015. In 2016, Italy was the only O.E.C.D. country that had a lower labor force participation rate of prime age men than the U.S., and the participation rate of American women had fallen from the top group of O.E.C.D. countries to near the bottom.

Krueger’s paper suggests that, though much of the decline can be attributed to an aging population and other trends that pre-date the Great Recession (for example, increased school enrollment of younger workers), an increase in opioid prescription rates might also play an important role in the decline, and undoubtedly compounds the problem as many people who are out of the labor force find it difficult to return to work because of reliance on pain medication.

Krueger’s research indicates that regional differences in medical practices affect the share of the population taking pain medication, even controlling for the population’s health and disability status.  A 10 percent increase in the amount of opioids prescribed per capita in a county is associated with a 1 percent increase in the share of individuals who report taking a pain medication on any given day, holding health and other factors constant.

To understand the labor force impacts of opioid prescription rates across the U.S., Krueger linked 2015 county-level opioid prescription rates to individual-level labor force data in 1999-2001 and 2014-16.

Over the last 15 years, the labor force participation rate fell more in counties where more opioids were prescribed. Here’s a county-by-county look at the relationship between the change in the labor force participation rate at the state level and the opioid prescription rate at the county level:

Map: Combined effect of opioid prescription rates and change in labor force participation rate, prime age adults, ages 25-54

Krueger notes that, “Regardless of the direction of causality, the opioid crisis and depressed labor force participation are now intertwined in many parts of the U.S.” He argues that finding a solution to the decades-long slide in labor force participation by prime-age men should be “a national priority.” Men who are outside the workforce, he writes, express very low levels of subjective well-being and report deriving relatively little meaning from their daily activities.

Krueger concludes:

Because nearly half of this group [men who are out of the labor force] reported being in poor health, it may be possible for expanded health insurance coverage and preventative care under the Affordable Care Act to positively affect the health of prime age men going forward. The finding that nearly half of NLF [not in the labor force] prime age men take pain medication on a daily basis and that 40 percent report that pain prevents them from accepting a job suggests that pain management interventions could potentially be helpful.

To learn more, read the full paper and download the data by Alan Krueger from the Fall 2017 edition of the Brookings Papers on Economic Activity.

Krueger’s paper is one of five new papers published in the Fall 2017 edition. Browse the edition to read more about all the new findings in economics.

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