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Loss of Life and Labor Productivity: The Canadian Opioid Crisis

Author

Listed:
  • Cheung, Alexander

    (University of Alberta, Department of Economics)

  • Marchand, Joseph

    (University of Alberta, Department of Economics)

  • Mark, Patricia

    (Vancouver Island Health Authority)

Abstract

Opioids were declared a public health emergency in British Columbia, Canada, in 2016, and from that year through 2021, 29,894 Canadians lost their lives to opioid overdoses. With more than two-thirds of those victims were employed in the five years prior to their deaths from opioids, this study aims to quantify their lost productivity to the Canadian economy, focusing on the pre-COVID period from 2016 to 2019. We apply two human capital model variants in our analysis, projecting forward the future economic output of individuals who died from opioids, based on industry when employed and age at time of death, from their deaths to what would have been their eventual retirements. The total estimated productivity loss to Canada is at least 8.8 billion dollars, with the equivalent value of statistical life calculations an order of magnitude higher, which are instead based on estimates of the amount of money that individuals would pay to avoid death. Our results challenge the notion that the opioid crisis predominantly affects unproductive members of society.

Suggested Citation

  • Cheung, Alexander & Marchand, Joseph & Mark, Patricia, 2020. "Loss of Life and Labor Productivity: The Canadian Opioid Crisis," Working Papers 2020-13, University of Alberta, Department of Economics, revised Dec 2022.
    • Handle: RePEc:ris:albaec:2020_013
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    References listed on IDEAS

    as
    1. Anne Case & Angus Deaton, 2017. "Mortality and Morbidity in the 21st Century," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 48(1 (Spring), pages 397-476.
    2. Banzhaf, H. Spencer, 2022. "The Value of Statistical Life: A Meta-Analysis of Meta-Analyses," Journal of Benefit-Cost Analysis, Cambridge University Press, vol. 13(2), pages 182-197, July.
    3. Hollingsworth, Alex & Ruhm, Christopher J. & Simon, Kosali, 2017. "Macroeconomic conditions and opioid abuse," Journal of Health Economics, Elsevier, vol. 56(C), pages 222-233.
    4. Antonis Targoutzidis, 2018. "Some adjustments to the human capital and the friction cost methods," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 19(9), pages 1225-1228, December.
    5. Anne Case & Angua Deaton, 2015. "Rising morbidity and mortality in midlife among white non-Hispanic Americans in the 21st century," Working Papers 15078.full.pdf, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies..
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    British Columbia; Canada; human capital; labor productivity; opioids; public health emergency; value of statistical life;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • I10 - Health, Education, and Welfare - - Health - - - General
    • J17 - Labor and Demographic Economics - - Demographic Economics - - - Value of Life; Foregone Income
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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