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The Role of Local Economic Conditions in the Opioid Crisis

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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. 1. The Role of Local Economic Conditions in the Opioid Crisis Michael Betz Assistant Professor, Dept. of Human Sciences
  2. 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. 3 Demand versus Supply Drivers Supply-side drivers • Increasing availability of powerful drugs Demand-side drivers • Increasing demand for deadly substances
  4. 4. 4 10 30 50 70 90 110 0 5 10 15 20 1999 2001 2003 2005 2007 2009 2011 2013 2015 PrescriptionRate OverdoseDeathRate US Overdose Death and Prescription Rates 1999-2016 All Drugs Prescription opioids Prescription rates OxyContin Reformulation 2010 KY, OH, WV PDMPs
  5. 5. 5 Overview 1. Supply-side drivers 2. Demand-side drivers
  6. 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. 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. 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. 9 Demand-side Factors - Community economic disadvantage - Mental health problems - Relational problems - Health conditions (chronic pain, sedentary life styles, etc.)
  10. 10. 10 Demand-side Factors - Community economic disadvantage - Mental health problems - Relational problems - Health conditions (chronic pain, sedentary life styles, etc.)
  11. 11. 11 Rateper100,000 Ohio Overdose Rates by Education Level HS Grad Some college Associates Bachelors
  12. 12. 12 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 11.0 12.0 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 US and Ohio Unemployment Rates 2000-16 US Ohio
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  15. 15. 15 Unemployment rates 1. Mask type of job
  16. 16. 16Source: Autor and Dorn (2013)
  17. 17. 17 Twin Forces Driving Trend 1. Outsourcing 2. Technological Change/Automation
  18. 18. 18 Twin Forces Driving Trend 1. Outsourcing 2. Technological Change/Automation
  19. 19. 19 11,000 13,000 15,000 17,000 19,000 1967 1975 1983 1991 1999 2007 2015 US Manufacturing Jobs 1967-2016
  20. 20. 20
  21. 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. 22 Koffi, Hurst, and Schwartz (2018) • Manufacturing decline lowered incomes for prime aged workers • State manufacturing decline increased OD rates (causal)
  23. 23. 23 Twin Forces Driving Trend 1. Outsourcing 2. Technological Change/Automation
  24. 24. 24 Workmen take out their anger on the machines by C L Doughty
  25. 25. 25 Median Family Real Income Productivity: Output per Hour
  26. 26. 26 0 200 400 600 800 1000 1200 1400 0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 1,000,000 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 MillionsofShortTons CoalMiningWorkers Coal Mining Employment and Production 1920- 2016 Coal employment Production
  27. 27. 27
  28. 28. 28 11,000 13,000 15,000 17,000 19,000 1967 1975 1983 1991 1999 2007 2015 US Manufacturing Jobs 1967-2016
  29. 29. 29 8090100110 2000 2005 2010 2015 ManufacturingOutputIndex Source: Kofi, Hurst, Schwartz 2018
  30. 30. 30 One more robot per thousand workers reduces the Employment/Pop Ratio by about 0.18-0.24 percentage points Source: Acemoglu and Restrepo 2017
  31. 31. 31 Ohio’s Industries 2000 2015 Manufacturing 15.4 10.4 Government and government enterprises 12.1 11.5 Retail trade 11.7 10.1 Health care and social assistance 9.9 12.8 Accommodation and food services 6.4 7.2 1992 < HS HS 2-YEAR BACHELORS 2016 < HS HS 2-YEAR BACHELORS
  32. 32. 32
  33. 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. 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. 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
  36. 36. 36 What’s the net result?
  37. 37. 37 Median Family Real Income Productivity: Output per Hour
  38. 38. 38 Productivity: Output per Hour Median Family Real Income
  39. 39. 39Source: Chetty et al. 2014
  40. 40. 40 Unemployment rates 1. Mask type of job 2. Mask LF participation
  41. 41. 41 58 59 60 61 62 63 64 65 66 67 68 1940 1950 1960 1970 1980 1990 2000 2010 2020 Labor Force Participation 1948-2016 Source: BLS
  42. 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. 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. 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)
  45. 45. 45 Substance Abuse Labor Force Participation
  46. 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. 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
  48. 48. 48 But are these things new?
  49. 49. 49 Trends in substance use disorder in the past year age 18+ 2002-2014 -2.6m SUD -2.6m AUD
  50. 50. 50 Trends in substance use disorder in the past year age 18+ by drug +230k HUD
  51. 51. 51 Past month Marijuana use age 12+ +10m Using Marijuana
  52. 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. 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
  54. 54. 54 Thank You! Betz.40@osu.edu
  55. 55. 55 Demand side: Relationships
  56. 56. 56 Single, Never married Widowed Married Men HS/GED BA or more OpioidOverdosesper100,000,Age25+ Divorced Widowed Married
  57. 57. 57
  58. 58. 58
  59. 59. 59
  60. 60. 60 Social isolation, loneliness, and living alone correspond increase likelihood of mortality by 29%, 26%, and 32%, respectively
  61. 61. 61 Uhis et al. (2014) • Preteens who spent 5 days away from screens had significantly better recognition of facial emotion expression

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