The Opioid Epidemic Hits the Work Force

Two of the most disturbing trends of the current century are that prime-working-age Americans are leaving the labor force and that an opioid epidemic is sweeping the country. Where only 3 percent of men ages 25–54 weren’t in the labor force in 1960, 8% weren’t in 2000, and 11% weren’t in 2016. That last year, meanwhile, nearly 40,000 Americans died of opioid overdoses.

And perhaps these phenomena are not entirely distinct, writes the economist Alan B. Krueger in a new paper released through the Brookings Institution. The study is largely an updated version of a paper Krueger released last year. His results were widely reported at the time (including by yours truly), but to briefly recap: Among nonworking men ages 25 to 54, nearly half take a pain pill on any given day, and two-thirds of the time, it’s a prescription medication. One-third of nonworking men say they have a disability, and 40% say pain keeps them from working.

An additional nugget the new paper provides, thanks to a new survey Krueger conducted this July, is that about two-thirds of nonworking men who take pain pills use government programs, especially Medicaid, to pay for them. But the more substantive contribution is a close look at the geographic connection between the opioid epidemic and the fall of labor-force participation.

The new analysis is rooted in the fact that opioid prescribing behavior varies tremendously by region. The top 10% of counties prescribe 31 times as many opioids per capita as the bottom 10% do. And this isn’t just because some places have more sick people than others: Krueger finds that when an area’s overall level of opioid prescribing goes up by 10%, an individual’s chance of taking painkillers on a given day goes up 1%, even after controlling for the person’s self-reported health, disability status, and demographics. If that sounds small, recall that the highest-prescribing counties are not 10% but 31 times as generous with the pills.

The next step Krueger takes is to look for a connection between opioid prescribing and labor-force participation. He writes that “labor force participation is lower in areas of the U.S. with a high rate of opioid prescriptions, and labor force participation fell more [between 1999 and 2015] in areas with a high rate of opioid prescriptions.” More sophisticated models, including ones taking account of manufacturing employment, find the same thing.

And finally, we arrive at the tricky part. Since prescribing practices do seem to affect opioid use, and since prescribing also correlates with the decline in labor-force participation, we can get at least a loose estimate of the extent to which the latter might result from the former. Krueger himself writes that his results are “hard to interpret,” that one of his assumptions is a “big leap,” and that the “calculation is best considered illustrative.” Nonetheless, it “suggests that the increase in opioid prescriptions could account for perhaps a 0.6 percentage point decline in [prime-age] male labor force participation, which is 20 percent of the observed decline [between 1999 and 2015].”

Another way of putting it is that the opioid epidemic might have taken more than 1 in every 200 men out of the labor force—a number that of course will be far higher in the areas hardest hit, given the enormous aforementioned 31-fold gap between counties with the heaviest and lightest prescribing rates. Krueger notes a study in Denmark that similarly found opioid prescribing to reduce labor-force participation, using a method that more plausibly estimates causality. (That study looked specifically at individuals who changed doctors when they moved.)

Krueger doesn’t extensively explore the follow-on effects of leaving the labor force for men, but given the focus of this blog, I’ll highlight one in particular: There’s some evidence that when male earnings decline, so does marriage; it can also lead to a greater share of kids being born out of wedlock and heightened child poverty.

All this is, of course, just one dimension of two very big problems. There’s much more to the labor-force decline than opioid addiction, and many horrifying effects of opioid addiction besides poor labor-market outcomes, including the breakdown of families. But perhaps that only underscores how dire both problems have become.

Robert VerBruggen is a deputy managing editor of National Review.

Editor’s Note: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or views of the Institute for Family Studies.