The Dynamic Interdependency Between Opioid Prescriptions and Unemployment

This paper estimates a dynamic panel model with feedback in order to investigate the dynamic interdependence between county-level opioid dispensing and unemployment. The paper hypothesizes that opioid prescriptions have deleterious effects on local labor markets. But those negative labor market conditions, once manifested, then lead to increased opioid prescribing. That feedback loop results in an unfortunate cycle in which the two – opioid prescriptions and unemployment – reinforce each other. Estimates reveal the existence of such a reinforcing feedback loop, but the magnitudes involved appear to be too small to facilitate meaningful policy interventions. The paper also offers evidence that opioid dispensing at the county level is endogenous with respect to unemployment, with endogeneity most likely stemming from the presence of healthcare infrastructure that reduces unemployment but also provides easier access to opioids.