September 12, 2018
The negative labor market effects of the opioid crisis have been substantially less severe in Virginia than they have been nationwide. Between 1999 and 2015, the volume of prescription opioids per capita in Virginia rose 57 percent, or about 3 percent annually. This rise in opioid use in Virginia was associated with a 0.6 percentage point decline in the state’s labor force participation rate of prime-age workers, slowing annual real gross domestic product (GDP) growth by 0.2 percentage points.
Labor Force Participation
Table VA-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 VA-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 0.5 percentage points and 0.6 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 Virginia means that in 2015 8,100 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 10,800 women in Virginia 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 Virginia to decline by 0.6 percentage points. That translates to a loss of 18,800 workers as of 2015.
From 1999 to 2015, the rise in opioid dependency and resulting decline in prime-age labor force participation cumulatively cost Virginia’s economy over 250 million work hours. Table VA-2 contains the cumulative loss of work hours associated with Virginia’s decline in labor force participation.
Table VA-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, Virginia’s economy lost an increasing number of work hours. Between 1999 and 2015, Virginia cumulatively lost a total of 254 million work hours. Since opioid dependency led more women out of the labor force than men, the majority—57 percent—of the lost work hours was attributed to Virginia’s decline in female labor force participation. Specifically, the state’s economy lost 146 million work hours due to absent female workers, and lost 108 million work hours due to absent male workers.
Real Economic Growth
The hundreds of millions of lost work hours slowed economic growth in Virginia. Table VA-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 VA-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 Virginia’s labor force participation was a noticeable cost to the state’s economy. From 1999 to 2015, Virginia’s economy cumulatively lost $14.8 billion in real economic output, which translates to the state’s annual real GDP growth rate slowing by 0.2 percentage points. To put this loss in perspective, from 1999 to 2015, Virginia’s real GDP grew 1.8 percent annually. Had opioids not drawn 18,800 prime-age workers out of the labor force, the state’s economy would have grown 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 $8.5 billion in real output between 1999 and 2015. The decline in male workers cost the economy $6.3 billion. The difference, however, is not large enough to translate to a substantially different decline in the economic growth rate, as the lost labor associated with each gender slowed the real GDP growth rate by 0.1 percentage point.