Summary:
The labor force participation rates of prime-age US workers dropped in March 2020—the start of the COVID-19 pandemic—and have still not fully recovered. At the same time, deaths from substance abuse were elevated during the pandemic relative to trend, indicating the number of people abusing substances may have increased, and those who abuse opioids and crystal methamphetamine have lower labor force participation rates than those who don’t abuse these substances. Could increased substance abuse during the pandemic be a factor contributing to the fall in labor force participation? Estimates of the number of additional people with a substance-use disorder during the pandemic presented in this article suggest that increased substance abuse accounts for between 9 percent and 26 percent of the decline in prime-age labor force participation between February 2020 and June 2021.
Key findings:
- Substance abuse deaths rose during the pandemic.
- If increased deaths reflect similar increases in user rates, increased substance abuse can account for between 9 percent and 26 percent of the decline in prime-age labor force participation between February 2020 and June 2021.
Center Affiliation: Center for Human Capital Studies
JEL classification: I12, J11, J21
Key words: COVID-19 pandemic, substance abuse, labor force participation
https://doi.org/10.29338/ph2022-5
The Federal Reserve Bank of Atlanta's Policy Hub leverages the expertise of Atlanta Fed economists and researchers to address issues of broad policy interest. Our research centers coordinate this work and seek to influence policy discussions. Areas of interest include: forecasting, fiscal policy, and macroeconomics (Center for Quantitative Economic Research); financial stability, innovation, and regulation (Center for Financial Innovation and Stability); human capital, labor markets, health, and education (Center for Human Capital Studies); and government-sponsored entity reform, mortgage markets, and affordable housing (Center for Housing and Policy). Sign up for email updates. Under "Publications" select "Policy Hub."