The U.S. Labor Market and Deaths of Despair
The United States is currently facing an epidemic of opioid overdose deaths. Twelve and a half million Americans reported misusing prescription opioids and 78 people died per day from opioid overdoses in 2016 (USDHHS 2017). Overdose deaths are concentrated most heavily among those with a high school degree or less (Case and Deaton 2015). While supply side factors, such as the availability of prescription opioids and heroin have likely played a role in this trend, the fact that suicide and liver failure deaths have also increased sharply over the same timeframe suggests broader societal changes may be influencing demand for such powerful drugs. One idea is that declining economic opportunity, especially for those with a high school degree or less, has increased the demand for opioids and increased the intensity with which this population engages in self-harm activities.
Previous work has chronicled the disappearance of so-called middle-skill jobs in the United States that have historically supported middle-class workers with less than a college degree (Autor 2010). Other studies have found both mental health and drug use to be countercyclical, with higher unemployment rates resulting in worse mental health and drug use outcomes (Hollingworth et al. 2017; Carpenter et al. 2017; Rhum 2015; Arkes 2007); however, to date no empirical study has identified a causal link between industry shifts for low-skill and mid-skill workers and opioid use.
We test whether these declines in middle skill jobs and increases in deaths of despair are related by examining whether county-level changes in wages given a county’s industry structure are connected to increases in overdose deaths, suicides, and liver disease deaths between 1999-2014. Using a Bartik (1991) instrument, we exploit exogenous industry-specific wage shocks that affect some counties and groups more severely than others. This approach provides causal evidence to the ongoing debate about the causes of the opioid crisis. Because local economic conditions factor differently into an individual’s outlook across the lifespan, we test for differences in the relationship between local economic conditions and deaths of despair rates for different age cohorts and racial groups. We find that places that experienced exogenous wage shocks experienced higher overdose and suicide rates during the 1999-2014 period, with significant variation across different demographics and the rural/urban hierarchy.