ILLICIT DRUG USE, ABSENTEEISM, AND EARNINGS AT SIX U.S. WORKSITES

I. INTRODUCTION Based on data from the 1993 National Household Survey on Drug Abuse, 28.6% of employed individuals in the United States have used an illicit substance at least once in the past year (U.S. Department of Health and Human Services 1995). Since this statistic has changed little from the early 1980s, drug use in the workplace has been targeted by employers and policymakers for possible intervention. Recent growth in workplace drug testing programs (Hartwell et al., 1997) and in employee assistance programs (Hartwell et al., 1996) provides clear evidence that employers are allocating significant resources to mitigate the possible adverse consequences of substance abuse on worker productivity. However, an ambitious study commissioned by the Institute of Medicine (Normand et al., 1994) reaches ambiguous conclusions about the relationship between drug use and performance indicators. Furthermore, the Institute of Medicine panel found that the effectiveness of workplace interventions, especially drug testing programs, also is uncertain. These findings are unexpected because medical studies clearly demonstrate that drug use lowers physical and emotional capabilities, which would normally be associated with lower productivity and income (e.g., Chait et al., 1985; Herning et al., 1989; Yesavage et al., 1985). Drug users may work fewer hours than nonusers (Zarkin et al., forthcoming [a]) and also may be less productive while working, resulting in lower compensation (Rice et al., 1990). In extreme cases, drug users may have longer periods of unemployment that could lead to eventual withdrawal from the labor market altogether (Kandel and Davies, 1990; Kaestner, 1993; Kandel et al., 1995). In addition to the emerging economic research on the consequences of drug use in the workplace, much debate still concerns the dose-response relationship between drug use and worker performance. For example, does any amount of recent drug use (e.g., previous 12 months) adversely affect workers? Or, is it really excessive or abusive levels of use that cause serious impairment and lower worker performance and productivity? Furthermore, uncertainty still exists about the impact of past drug use on worker performance. For example, even if an individual is "drug free" today, is there a delayed or cumulative relationship with job performance from drug use that occurred several years ago? Recently, economists and other researchers have intensified the study of the relationship between alcohol and illicit drug use on job performance measures. Most of this research has focused on the drug use/earnings relationship (Buchmueller and Zuvekas, 1994; Gill and Michaels, 1992; Kaestner, 1991 and 1994; Register and Williams, 1992), but some of the current studies explore the connection between drug use, labor supply, and workplace behavior (Kaestner, 1993; Register and Williams; Zarkin et al., forthcoming [a]; Kandel et al., 1995). This paper contributes to the growing economic literature on workplace drug use in the following ways. First, the relationships among illicit drug use, wages, and absenteeism are analyzed using a proprietary database of more approximately 1,600 employees at six worksites. Previous studies on the drug use/earnings relationship rely on large national data sets of randomly selected individuals. To our knowledge, this is the first study to systematically examine the drug-use patterns and potential consequences for a relatively homogeneous sample of workers at a small number of worksites. Second, the worksite-specific sample controls for differences in worksite and industry factors, many of which are unobserved and hence not controlled for in analyses of national data sets. For example, the data contain extensive information on worker demographics and behaviors, earnings, and absenteeism, as well as information on individuals' current and past use of illicit drugs and alcohol, all of which are rarely available from a single source. …