Association for Public Policy Analysis & Management

The opioid epidemic is believed to have a negative impact on the labor market. Previous studies have found that there is a causal impact of opioids on adverse labor market outcomes by using instrumental variables.

However, all these studies have focused on the general labor market, rather than focusing on specific labor market subpopulations, such as older workers. For the elderly population, results from the general labor market might not apply due to two reasons. First, opioid abuse is less prevalent among the elderly population. Second, chronic pain which opioids target to treat is one of the substantial factors for early retirement.

Therefore, we need to find whether the relationship between opioids and labor market activity by older workers is different from that of the overall market. This is important since that activity by older workers is closely related to major public policies. Given that many opioid policies restrict opioid uses, it might adversely affect people who need to use it such as old workers, leading to the negative labor outcomes among the older populations.

In this study, I will examine the causal effect of opioid prescriptions on older workers’ labor market outcomes, such as retirement decisions at the county-level. This study will use providers’ preferences on opioid over other painkillers computed at the county level as an instrumental variable by using Medicare Part D prescription drug 2013-2016 datasets. To my knowledge, this is the first paper to identify the causal relationship between the opioid epidemic and older workers’ outcomes.