Health and Labor Market Consequences of Low-Value Care: The Role of Practice Style

We investigate the health and labor market consequences of primary care variation in benzodiazepine prescriptions, a common type of low-value care. Linking Dutch general practitioners’ records to administrative data, we construct an exogenous measure of prescribing behavior that exploits institutional constraints limiting patient choice. Using the loss of a close relative as a common mental health shock and a dynamic difference-in-differences approach, we find that patients treated by high-prescribing GPs are more likely to receive out-of-guidelines benzodiazepine prescriptions, become long-term users, and are less likely to access specialized mental health care. These patients also experience worse labor market outcomes, including increased short-term reliance on unemployment benefits and substantial long-term declines in earnings, primarily driven by reduced wages.