The Opioid Epidemic and the U.S. Labor Market

The Opioid Epidemic and the U.S. Labor Market

December 10, 2018
The Opioid Epidemic and the U.S. Labor Market
Some Members of Congress have expressed strong
accreditation body for health care organizations. Included in
concerns about the societal costs of the opioid epidemic,
these standards were PE1.4: pain is assessed in all patients
including its potential to adversely affect the U.S. economy.
and RI.1.2.8: patients have a right to appropriate
Efforts to quantify the annual economic costs of opioid
assessment and management of pain.
abuse and dependence produce estimates in the tens of
billions of dollars, of which workforce losses—decreased
Occurring alongside this shift in pain treatment philosophy
productivity, missed days of work, and premature death—
was the 1996 release and aggressive marketing of
account for a substantial share. Opioid abuse could further
OxyContin, a high-dosage formulation of the opioid
generate labor force costs—directly or indirectly—if it
oxycodone. The drug was pitched as an effective but non-
affects labor force participation decisions and
addictive pain reliever based on its slow-release formula,
unemployment. A small body of research has explored
despite early reports that it was just as addictive as other
correlations between opioid abuse and these indicators, but
opioids and easily diverted from intended use. Between
it remains unclear whether the opioid epidemic is a driver
1991 and 2011, opioid prescriptions tripled. As
or an outcome of recent workforce trends or an indicator of
prescriptions increased, so did diversion. A study by the
other underlying factors.
National Institutes of Health found that the rates of
nonmedical use of prescription opioids increased from 1.8%
The discussion that follows looks at studies that have
to 4.1% of the adult population between 2001-2002 and
examined the relationship between recent labor market
2012-2013. In 2002, roughly 1.5 million people reported
patterns and opioid misuse (i.e., illicit opioid use and
pain reliever abuse or dependence in the previous year. In
misuse of prescription drugs, meaning use in any way other
2012, that number was over 2 million. Over that same time,
than as prescribed). It is important to bear in mind,
the number of people abusing heroin doubled—from
however, that some opioids have a legitimate medical use
240,000 in 2002 to over 480,000 in 2012. In 2016, over 2
and may improve both labor market participation and
million Americans qualified for an opioid use disorder
worker productivity. For example, findings from a recent
diagnosis.
study of county-level opioid prescribing rates and
employment suggest that prescription opioids allowed some
Figure 1. Opioid-Related Deaths, 1999-2017
women to work who otherwise would not. In addition,
some research suggests that untreated pain is associated
with lower worker productivity. An overview of the recent
opioid epidemic is provided first and followed by a
discussion of how it may have interacted with the labor
market.
The Recent Opioid Epidemic
Opioids—drugs derived from the opium poppy or those
emulating the effects of opium-derived drugs—bind to
opioid receptors in the body that are essential in the
regulation of pain and emotions. Opioids have been used by
the medical community to treat pain for centuries, but they

Source: Centers for Disease Control and Prevention (CDC).
also have tremendous potential for abuse and addiction. For
this reason, stakeholders in the United States, such as the
Notes: “All opioids” includes deaths that include at least one of the
federal government and the medical community, generally
following International Classification of Diseases (ICD-10) codes:
sought to minimize the use of opioids outside of palliative
T40.0-T40.4, or T40.6. ICD-10 codes for the individual opioid lines
care for much of the 20th century.
are heroin (T40.1), natural and semi-synthetic opioids (T40.2), and
synthetic opioids (T40.4). Estimates are age-adjusted.
Beginning in the 1970s and 1980s, advocacy groups,
believing that pain was being undertreated, sought to
Since the onset of the epidemic in the late 1990s, rates of
increase the use of opioids for pain management. By the
opioid overdose deaths have also increased significantly.
1990s, advocacy efforts—including the “pain as the fifth
Driven largely by prescription opioid pain relievers, opioid
vital sign” campaign—successfully shifted the treatment
overdose deaths tripled from 1999 to 2014. In 2017, the
approach to chronic pain (particularly non-cancer pain) to
age-adjusted rate of opioid overdose deaths in the United
include more opioids This movement was bolstered by the
States was nearly 15 per 100,000 people—up from 2.9 per
2001 introduction of new pain management standards by
100,000 in 1999.
the Joint Commission—an independent, non-profit
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The Opioid Epidemic and the U.S. Labor Market
Prescription opioid death rates began to decline in 2013,
Krueger found that prime-age men’s LFPR was lower and
likely in response to physician education, prescription
fell more over a 15-year period in counties with high opioid
monitoring, a law enforcement crackdown on “pill mills,”
prescriptions per capita. He found similar results for the
and increased regulations (e.g., of Internet pharmacies).
decline in prime-age women’s LFPR.
Total opioid death rates did not decline, however. Heroin
(an illegal opioid) and later fentanyl (a highly potent
Nonetheless, many workers with substance abuse disorders
synthetic opioid) drove the continued increase in opioid-
are employed—for example, data from the 2017 National
related deaths. As reflected in Figure 1, the opioid
Survey of Drug Use and Health (NSDUH) indicate that a
epidemic occurred in three waves. The first wave began in
majority of adults who self-report opioid misuse were
the 1990s—cresting around 2010—and included
employed at the time of survey—but the performance of
prescription overdose deaths (captured by the “natural and
workers with substance abuse disorders appears impaired.
semi-synthetic opioids” line of Figure 1). The second wave
A recent analysis of NSDUH data indicates that workers
began in 2010, encompassing heroin deaths. The third wave
who misuse pain medication had more days of unscheduled
involved highly potent synthetic opioids beginning in 2013.
absence than the general workforce. Public health studies
identify additional opioid misuse-related costs incurred by
Opioids and the Labor Market
employed workers resulting from diminished job
The rise in prescription opioid use and opioid-related
performance, additional days of missed work (including for
overdose deaths coincided with a notable decline in the
incarceration), and premature death. A widely discussed
labor force participation rates of the prime-age population
study researchers of the economic burden of prescription
and encompassed two economic recessions, causing some
opioid misuse estimated such lost productivity costs for
economists to ask whether deteriorating economic
2013 to be $20 billion.
conditions had contributed to drug overdose (and other)
deaths for certain populations. While some evidence points
Research has also explored connections between opioid
to a relationship between economic shocks (i.e., that
abuse and unemployment. A study published in a 2017
temporarily raise unemployment) and opioid-related deaths
issue of the Journal of Health Economics, for example,
or illness, a more recent set of findings support an
found that opioid-related deaths and emergency department
alternative view that it was not job loss that fueled the
visits increased in response to a temporary rise in county-
opioid epidemic but instead a changing drug environment
level unemployment. This correlation between drug abuse
that made opioid prescriptions much more available than in
and unemployment aligns with recent reporting on
the past, with potential workforce implications.
employers’ struggle to find job applicants who can pass a
drug test that screens for opioids and other drugs.
Opioid Abuse and the Workforce
Policymakers generally view the labor force participation
A Complex Relationship
rate (LFPR) as an important economic indicator because the
It is possible that the increased supply of opioids has
labor force is a key determinant of economic output. For
expanded or intensified drug abuse such that opioid users’
this reason, the decline in the prime-age (i.e., ages 25-54
interest in or suitability for work has declined. Another
years) LFPR has raised questions about the country’s ability
possibility is that declining job opportunities, particularly
to reach its full economic potential (Figure 2).
for less-skilled workers, has led to increased drug use and
other health-deteriorating behavior. These scenarios are not
Figure 2. Prime-Age Labor Force Participation Rates
mutually exclusive: Opioids may both contribute to and
result from weak labor market outcomes.
A more complex relationship may exist as well. Some
studies, for example, note increased reports of pain and
disability among labor market nonparticipants. This raises
the possibility that injury or disability is a causal factor for
nonparticipation, and increased opioid use is an indicator of

this trend. Indeed, opioids are not uncommon among
Source: Bureau of Labor Statistics.
injured workers: Recent worker compensation claim data
for 26 states indicate that a majority of claimants who were
Labor force participation decisions are complex, and
prescribed pain medication received opioids. Even if opioid
research identifies several factors as potential contributors
use has a limited role in causing labor market separations,
to these LFPR patterns, including fewer jobs for less-
increased reliance on pain medication may have made it
educated workers, poor health and disability, and other
more difficult for nonparticipants to return to work.
employment barriers. While the opioid epidemic is
Economists Anne Case and Angus Deaton observe that
generally not viewed as a primary driver of recent
while opioids may not be the “fundamental factor” of rising
workforce trends, some have pointed to it as a potential
mortality and morbidity among white middle-age workers,
contributor to recent declines in LFPRs. This is generally
“the prescription of opioids for chronic pain added fuel to
attributed to the starkly rising opioid-related death rates for
the flames, making the epidemic [of rising mortality and
this age group since 1999 and some evidence that opioid-
morbidity] much worse than it otherwise would have been.”
related emergency room visits increased for them as well.
Preliminary estimates by economist Alan Krueger provide
the most rigorous exploration to date of the relationship
Sarah A. Donovan, Specialist in Labor Policy
between opioid prescriptions and labor force participation.
Johnathan H. Duff, Analyst in Health Policy
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The Opioid Epidemic and the U.S. Labor Market

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