What Do We Know About the Effects of Substance Use on Labor Productivity? A Survey of Results and Related Methodological Issues

• Activity Number: 209
• Type: Contributed
• Date/Time: Monday, July 30, 2007 : 2:00 PM to 3:50 PM
• Sponsor: Section on Health Policy Statistics
• Author(s): Richard Bryant*+ and V. A. Samaranayake
• Companies: University of Missouri-Rolla and University of Missouri-Rolla
• Keywords: Alcohol and Drug Abuse ; Wages ; Hours Worked ; Causal Inference ; Longitudinal Models

Abstract

The effect of substance abuse on productivity is an important issue in public policy. This topic has received considerable attention since the 1980s, with numerous publications reporting estimates of the economic impact of substance abuse. These results, however, do not paint a consistent picture. Some studies imply negative impacts of substance abuse on productivity, while others show a positive relationship. It is not clear that such discrepancies can be explained by differences in the data. The divergent results can be due to methodological differences. Further, the statistical associations found by researchers may not be indicative of a causal relationship. While many authors have resorted to longitudinal models to account for unobserved factors, it is not clear that this approach leads to true causal inference. We investigate this issue and explore possible solutions.