Employment shocks and demand for pain medication: Understanding the channels that drive opioid use

Higher employment ratios can affect opioid use through two main channels: by increasing physical pain from working or by reducing mental distress that may contribute to substance misuse. To separate these channels, I contrast the effect of labor demand shocks on the use of opioids with the effect on the use of over‐the‐counter painkillers—commonly used to treat pain but not mental distress. I find that during local economic expansions, opioid use declines while the demand for over‐the‐counter pain relief medication increases. Employment changes in high injury industries accentuate this pattern. One possible explanation is that, during local economic expansions, the use of pain medications to manage work injuries increases while the misuse of opioids decreases.