The Effects of the Opioid Crisis on Employment

Abstract

We show that the opioid crisis slows transitions to employment from unemployment and nonparticipation. We identify the effect of the opioid crisis from cross-state variation in triplicate prescribing regulations, which produced long-lasting reductions in opioid use by reducing the initial distribution of the blockbuster opioid OxyContin. Difference-in-differences estimates show that triplicate regulations induce unemployed and nonparticipating workers in triplicate states to return to employment about 10 percent faster than workers in nontriplicate states. These estimates imply a 1.1 percentage point higher level of employment in steady state.