Substance abuse contributes to underemployment

The labor force participation rate – the proportion of the adult population either working or looking for work – has not fully recovered from pre-pandemic levels. A new paper sheds light on one factor behind this deficiency: substance abuse.

why does it matter: there is sharp manpower shortage In the United States, this is one reason – Along with declining immigration, childcare issues and ongoing concerns about COVID-19.

News leadership: Between 9% and 26% of the decline in labor force participation between February 2020 and January 2022, among people aged 25-34, is probably due to increased dependence on substances such as opiates and methamphetamine. That’s according to findings from a research paper released this week by the National Bureau of Economic Research.

• In recent months, workforce participation has increased—and is now half a percentage point lower than it was in the pre-pandemic period. 18% to 52% of that remaining deficiency may be from those with substance abuse, says Karen Kubicki, an economist at the Federal Reserve Board of Atlanta and co-author of the research.

In numbers: No specific data is available on the number of people who have switched to these substances during the pandemic. Therefore, to reach this conclusion, the researchers supported it.

• They had a rough sense of how drug use affects workforce participation: Previous research has indicated that the labor force participation rate of opioid users is 13 percentage points lower than the rate for nonusers, and for methamphetamine users, it is 16 points lower.
• They found 17,522 more deaths in the United States attributable to opioid and methamphetamine use than expected between April 2020 and June 2021.
• These numbers likely reflect an increase in the use of these drugs, Kubicki says. (Some may be due to reduced medical care available or a shift in opioid consumption toward the more deadly fentanyl.)
• Using the additional death numbers, the study estimates that the number of drug users increased by about 2.8 million over the time period.

The increase in drug abuse is linked to a broader problem: Mental and physical health problems also lead to labor shortages, Axios’s Felix Salmon wrote last year.

• According to one recent estimate, a prolonged COVID could keep 1.6 million out of the labor market as well.

recovery: The surge in opioid abuse dating back to the early 2000s has kept an increasing number of workers of adult age out of the workforce. The epidemic aggravated the situation.

Bottom line: This is a sticky problem. By definition, quitting such addictive drugs is very difficult, note the paper’s authors.