September 12, 2018
The negative labor market and economic effects of the opioid crisis have been substantially less severe in Montana than they have been nationwide. Between 1999 and 2015, the volume of prescription opioids per capita in Montana rose 71 percent, or about 3 percent annually. This rise in opioid use in Montana was associated with a 0.7 percentage point decline in the state’s labor force participation rate of prime-age workers, slowing annual real gross domestic product (GDP) growth by 0.3 percentage points.
Labor Force Participation
Table MT-1 contains the change in the prime-age labor force participation rate due to opioids between 1999 and 2015, and the resulting number of workers absent from the labor force as of 2015.
Table MT-1: Impact of Opioids on Prime-Age Labor Force Participation, 1999-2015
|Gender||Prime-Age Labor Force Participation Rate, 1999-2015 (in percentage points)||Workers, 2015 (in thousands)*|
|*Estimates for each gender may not add to total due to rounding.|
The rise in opioid prescriptions from 1999 to 2015 led the labor force participation rate for both prime-age men and women to decline. Opioids lowered the participation rates of prime-age men and women by 0.6 percentage points and 0.7 percentage points, respectively. For perspective, opioids decreased nationwide labor force participation rates of prime-age men and women by 1.4 percentage points and 1.8 percentage points, respectively.
The decline in the prime-age male labor force participation rate in Montana means that in 2015 1,100 men were absent from the labor force due to opioids. The steeper decline in prime-age female labor force participation means that even more women were absent from the labor force. In 2015, opioids kept 1,400 women in Montana out of the labor force. Together, the growth in per capita prescription opioids from 1999 to 2015 caused the total prime-age labor force participation rate in Montana to decline by 0.7 percentage points. That translates to a loss of 2,400 workers as of 2015.
From 1999 to 2015, the rise in opioid dependency and resulting decline in prime-age labor force participation cumulatively cost Montana’s economy over 30 million work hours. Table MT-2 contains the cumulative loss of work hours associated with Montana’s decline in labor force participation.
Table MT-2: Impact of Opioids on Work Hours, 1999-2015
|Gender||Work Hours, Cumulative 1999-2015 (in millions)|
As the number of individuals absent from the labor force due to opioids grew, Montana’s economy lost an increasing number of work hours. Between 1999 and 2015, Montana cumulatively lost a total of 34 million work hours. Since opioid dependency led more women out of the labor force than men, the majority—56 percent—of the lost work hours was attributed to Montana’s decline in female labor force participation. Specifically, the state’s economy lost 19 million work hours due to absent female workers, and lost 15 million work hours due to absent male workers.
Real Economic Growth
The tens of millions of lost work hours slowed economic growth in Montana. Table MT-3 contains the cumulative reduction in real economic output due to the opioid crisis and the associated decline in the annual real GDP growth rate.
Table MT-3: Impact of Opioids on Real Economic Growth, 1999-2015 (in 2009 dollars)
|Gender||Real Output, Cumulative 1999-2015 (in billions)||Annual Real GDP Growth Rate, 1999-2015 (in percentage points)|
From 1999 to 2015, the opioid-induced decline in Montana’s labor force participation was a noticeable cost to the state’s economy. From 1999 to 2015, Montana’s economy cumulatively lost $2.0 billion in real economic output, which translates to the state’s annual real GDP growth rate slowing by 0.3 percentage points. To put this loss in perspective, from 1999 to 2015, Montana’s real GDP grew 2.4 percent annually. Had opioids not drawn 2,400 prime-age workers out of the labor force, the state’s economy would have grown 2.7 percent each year, or over 10 percent faster.
Since more women left the labor force due to opioids than men, the decline in female labor force participation resulted in a larger portion of the economic cost. The decline in female labor translated to a cumulative loss of $1.1 billion in real output between 1999 and 2015, slowing Montana’s real GDP growth rate by 0.2 percentage points. The decline in male workers cost the economy $900 million, which reduced the state’s real GDP growth rate by 0.1 percentage point.