During the National Regional Transportation Conference (June 2019, Columbus, OH), Michael Betz, Ohio State University, shared his research on the connections between economic trends and substance use disorder.
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The Role of Local Economic Conditions in the Opioid Crisis
1. The Role of Local Economic
Conditions in the Opioid Crisis
Michael Betz
Assistant Professor, Dept. of Human Sciences
2. 2
Costs
• Opioid abuse cost Ohioan’s $6.6-8.8 billion in 2015
• Roughly what Ohio spends on K-12 education
• White House CEA (2017)
• ~$500 billion in 2015
• $10.32 trillion in costs between 1999-2016 for entire US
• ~50% of US GDP in 2017
3. 3
Demand versus Supply Drivers
Supply-side drivers
• Increasing availability of powerful drugs
Demand-side drivers
• Increasing demand for deadly substances
6. 6
Leading Causes of Death Under 55 in 2016
Cause KY, OH, PA, WV US
Drug overdoses 10,415 56,679
Cancer 6,422 58,740
Heart disease 5,694 49,498
Suicide 3,048 28,999
Homicide 1,638 16,970
Chronic liver disease 998 12,190
7. 7
Leading Causes of Death Under 55 in 2016
Cause KY, OH, PA, WV US
Drug overdoses 10,415 56,679
Cancer 6,422 58,740
Heart disease 5,694 49,498
Suicide 3,048 28,999
Homicide 1,638 16,970
Chronic liver disease 998 12,190
8. 8
Leading Causes of Death Under 55 in 2016
Cause KY, OH, PA, WV US
Drug overdoses 10,415 56,679
Cancer 6,422 58,740
Heart disease 5,694 49,498
Suicide 3,048 28,999
Homicide 1,638 16,970
Chronic liver disease 998 12,190
9. 9
Demand-side Factors
- Community economic disadvantage
- Mental health problems
- Relational problems
- Health conditions (chronic pain, sedentary
life styles, etc.)
10. 10
Demand-side Factors
- Community economic disadvantage
- Mental health problems
- Relational problems
- Health conditions (chronic pain, sedentary
life styles, etc.)
21. 21
Pierce and Schott (2017)
• Counties more exposed to trade
liberalization had larger manufacturing
declines
• More exposed counties had higher rates
of suicide and related causes of death
22. 22
Koffi, Hurst, and Schwartz (2018)
• Manufacturing decline lowered incomes
for prime aged workers
• State manufacturing decline increased
OD rates (causal)
33. 33
Involuntarily job displacement approximately
doubled the short-term mortality rates of
those displaced and reduced their life
expectancy on average by 1.5 years
-Sullivan and von Wachter (2009)
34. 34
Carnegie Mellon Reels
After Uber Lures Away
Researchers
Uber staffs new tech center with
researchers poached from its collaborator
on self-driving technology
Amazon opens grocery
store with no checkouts
January 22, 2018
Robot spending will hit $188 billion by
2020, report predicts
Robotics and related services are expected to reach
new heights, driven by an expanding market.
First Fully Automated Indoor
Farm Being Built In Ohio
September 25, 2018
35. 35
Currently 47 million workers with HS
degree or less
Driving: 3.4 million
Grocery store attendants: 2.4 million
Fast food counter workers: 3.7 million
42. 42Source: Kofi, Hurst, Schwartz 2018
FractionWorkingZeroWeeksDuringYear
High school or less
Some College
Bachelors or more
Fraction Working Zero Weeks During the Year
Males 21-55 by Education
43. 43
In 2017, ~2.1 million people with opioid use
disorder
Could account for 78% of non-boomer LFP
drop
Could be 100% in KY, OH, PA, WV
44. 44
Men NLF express much lower levels of
meaning to their daily lives than LF men
• Not so for women
Half of prime age men NLF use daily pain
medication (Krueger 2017)
46. 46
Aliprantis, Fee, and Schweitzer
10% increase in local prescription rate
• 0.17 pp decline for women
• 0.50 pp decline in LFP for men
• 0.70 pp decline low educated white men
• 1.01 pp decline for minority men
47. 47
When you have people who are not
taking part of the economic life of the
country in a meaningful way, who don’t
have the skills and aptitudes to play a
role or who are not doing so because
they’re addicted to drugs or in jail, then
in a sense, they are being left behind.
-Federal Reserve Chairman Jerome
Powell
52. 52
Policy recommendations
Help existing users
1. Increase availability/access of MAT
2. Development of long term care
3. Public health, not criminal justice approach
53. 53
Policy recommendations
Prevent new users
1. More thoughtful (slower) approach to economic policy
2. Proactive approach to automation
3. Reduce prescription rates back to 1995 levels
4. Interrupt intergenerational transmission
61. 61
Uhis et al. (2014)
• Preteens who spent 5 days away from
screens had significantly better
recognition of facial emotion expression
Notas del editor
The opioid crisis is no longer an epidemic it is endemic
Because the crisis is so wide-spread, a lot of academics across a wide range of disciplines from public health, to medicine, to sociology, to economics, and many others have tried to figure what are the main drivers of the crisis in the hope that we can reverse trend and save lives
Economists in particular have framed the question by dividing causal factors into supply-side factors versus demand-side factors
This was prior to much federal funding to address the drug crisis. Wanted to give some sense of the economic costs of the crisis in order to show what magnitude of resources is justified to address the crisis.
Supply side—What role does having 69 doses of prescription opioids per year for every man woman child in Ohio have on overdose rates?
Demand side—Why are people demanding these incredibly dangerous substances at a higher rate than in previous generations
400% increase in opioid prescriptions between 1999-2010…but only a 30% decrease from 2010-2016. Still have 3x as many prescriptions as in 1999.
Drug overdoses are now the leading cause of death for Ohioans under 55
Deaths went up to about 4,100 in 2016
Drug overdoses are now the leading cause of death for Ohioans under 55
Deaths went up to about 4,100 in 2016
US Suicide rate increased 25% 1999-2016
Economic disadvantage: where you lives affects your economic prospects
Mental health: Increase in the diagnosis of anxiety and depression
Relational problems: Americans have always placed a high value on personal autonomy and self-reliance, but one of the consequences of that we’re one of the most social isolated and relationally lonely cultures that has ever existed
Health conditions: Hard to know how this compares to past generations, but could be a plausible factor driving people to turn toward drugs
This a an epidemic that is highly concentrated among those with a low education
HS grads have OD rates 4.5 times higher than those with some college, 14 times higher than those with bachelors
Even though we have anecdotes of the suburban high school football player who got hooked after an injury
Things this hides
Geographic differences
Types of jobs
Labor force participation
We’re all aware of the magnitude of this crisis. In 2016, over 64k Americans died of drug overdose and it became the leading cause of death of Americans under the age of 50. But as we know with a lot of other economic and social trends, there are a wide range of regional outcomes within the US and often between rural and urban areas. This session in particular is good example of that since we have representatives from Ohio, PA, and WV, three of the four states with the highest OD rates in the country, but at the opposite end of the spectrum there are states like Nebraska and South Dakota whose rates aren’t much higher than the national average in 2000. Just looking at this map and seeing not only the variation, but the pockets of both high and low overdose rates it just makes you ask man what is going on in those four states that I mentioned that have such high rates.
any period since 1990, roughly 52 percent of men with a high school degree or less have been engaged in one of three activities at any point in time: working in manufacturing; working in construction; or not working at all.
During the period depicted in the Figure, the share of men working in construction was quite similar in 1990, 2000 and 2017. It therefore follows that, over approximately 30 years, there has been a one-to-one mapping between declining manufacturing shares and rising non-employment rates for prime age men with a high school degree or less.
any period since 1990, roughly 52 percent of men with a high school degree or less have been engaged in one of three activities at any point in time: working in manufacturing; working in construction; or not working at all.
During the period depicted in the Figure, the share of men working in construction was quite similar in 1990, 2000 and 2017. It therefore follows that, over approximately 30 years, there has been a one-to-one mapping between declining manufacturing shares and rising non-employment rates for prime age men with a high school degree or less.
There was legitimate concern that machines would destroy most peoples jobs
The power loom and the cotton gin increased worker productivity by a factor of 40-50
This movement didn’t gain traction because people found alternative work quickly. Some people were still needed to run the machines and others were needed to produce parts
What was largely true through most of the 20th and 21st centuries is that machines did relatively simple jobs, they couldn’t make decisions,
These jobs though were beginning to become a little more complex, so you would need more education and training.
The process of machines replacing human workers has continued throughout the 20th and 21st centuries
Coal mining is a very poignant example. In 1920 almost 900k coal miners worked in the mines. December’s estimate from the BLS is 53k coal miners
But at the same time production continued to steadily increase. These jobs didn’t go to China. The US is producing twice as much coal as it did 60 years ago.
I’m sure these sentiments to bring back coal jobs are well meaning to those in coal country, in order to get coal jobs back they would have to stop using this…
any period since 1990, roughly 52 percent of men with a high school degree or less have been engaged in one of three activities at any point in time: working in manufacturing; working in construction; or not working at all.
During the period depicted in the Figure, the share of men working in construction was quite similar in 1990, 2000 and 2017. It therefore follows that, over approximately 30 years, there has been a one-to-one mapping between declining manufacturing shares and rising non-employment rates for prime age men with a high school degree or less.
The study period was 1990-2007. Since 2007 the capabilities of robots and automation has risen substantially. In 2007, the first iPhone had just been released
This is only industrial robots, like in mfg. Does not capture the effects of AI or nonindustrial robots
In 1980 the HS/College wage gap was about 20%. Now its about 75%
The people losing mfg jobs are not the same people getting heath and social assistance jobs
The pace of automation is quickening faster than anyone expected.
Quote about self-driving cars in 2005 (it would never happen)
High skill workers are more valuable because they can work as complements with complex machines
Mid-skill workers have largely moved to low skill jobs if they transitioned at all
Rate of nonworking men has tripled in the last 50 years
~5.2 million workers from 2009-2014
Half from boomers retiring
Some from great recession
Almost half from prime aged men and women not entering labor force
Abraham and Kearney (2017) suggests that the secular decline in real wages of less skilled
workers is a major contributor to the secular decline in their participation rate
By 2016, fully one-fith of all men who had only a high school education or less worked ZERO weeks during the year
In 2016, only 82.2 percent of prime age men were working, compared to 86.8 percent of men aged 21-55 worked in 2000. About half of this decline occurred prior to the Great Recession. Figure 2 shows the annual decline in hours worked for men aged 21 to 55
4 Estimates for the population 12 years old and older is not readily available from the American Community Survey, thus we use the more commonly used 16 years and older. In 2015, there were no opioid overdose deaths among the population under 15 years old, so we assume the number of opioid abusers 12 to 14 is small.
In 2016, the active Ohio labor force was 5.7 million people, down from a peak of 6 million in 2007 (BLS). If we consider the change over time, there were 300,000 fewer active workers in the labor force in 2016 than 2007. Given that opioid dependency and abuse can limit a person’s ability to participate in the labor force, one way at looking at the estimates for opioid abuse and dependency is that it could account for a third to more than a half of the decline in workforce participation since 2007.
Drugs are so addictive that those who leave the labor force are more likely to leave it permanently
This is a cyclical problem
For many people, substances just aren’t their thing