UT Study: Opioid Prescriptions May Impact Labor Force Participation

January 28, 2019

Prescription opioids may negatively impact labor force participation and unemployment nationwide, according to findings in a new study co-authored by economists at the University of Tennessee and published in The Journal of Human Resources.

The study, which looked at county-level data from across the U.S., found that a 10 percent increase in per capita opioid prescriptions leads to a 0.6 percentage point drop in labor force participation rates and a 0.1 percentage point increase in county unemployment rates.

“The effects are really large,” said Matt Harris, assistant professor in UT’s Boyd Center for Business and Economic Research and co-author of the study. “Prescription opioids may explain up to one-half of the decline in labor force participation since 2000.”

Harris co-authored the paper, "Prescription Opioids and Labor Market Pains," with UT’s Larry Kessler, Matt Murray and Beth Glenn, now a post-doctoral scholar at Tulane University. The researchers were prompted to investigate a link between labor markets and opioid usage after employers began asking why no one was applying for job openings.

“We found that opioids have this strong adverse effect on labor force participation but only a marginally significant effect on the unemployment rate, which leads us to believe that opioids are leading individuals to exit the labor force entirely,” said Kessler.

Tennessee was among the states with the highest number of heavy opioid-prescribing practitioners. On average, providers in Tennessee write 1.4 opioid prescriptions per person per year. At the average dosage per prescription, this is equivalent to prescribing 80 opioid doses to every man, woman and child in Tennessee each year.

The researchers emphasized that addressing the opioid epidemic will require considerable funding and an increased focus on treatment therapy. In addition to quelling the adverse health effects of the epidemic, they said there are considerable economic gains to be attained from addressing the core issue of addiction.

“The results suggest that in Tennessee, you could effectively boost income among residents by $800 million per year if you reduce opioid usage 10 percent,” said Harris. “So long as it’s done carefully. If you simply shut off the taps, you’re likely to convert high-functioning addicts into low-functioning addicts, which is not good. What these results show is that there are economic gains to be had from successfully addressing opioid dependence.”

Other key findings:

• The detrimental effect of prescription opioids on labor markets holds true for both rural and non-rural counties.

• Prescription opioids have the strongest adverse effects in the counties with higher labor force participation rates and lower unemployment rates, perhaps suggesting that the opioid-related damage has already been done in areas with low labor force participation.

CONTACT:

Erin Hatfield (865-974-6086, ehatfie1@utk.edu)

Megan Boehnke (865-974-3242, mboehnke@utk.edu)