Further Evidence on the Labor Market Effects of Addiction: Chronic Drug Use and Employment in Metropolitan Miami

I. INTRODUCTION Many employees use illicit drugs either at or outside the workplace. The 1999 National Household Survey on Drug Abuse (NHSDA) reported that 9.4 million adult drug users (77 percent of all users age 18 and older) were employed (Substance Abuse and Mental Health Services Administration, 2000). Employee drug abuse constitutes a substantial economic burden to society. One study estimated that employee drug use resulted in an estimated cost to society of $69.4 billion in 1992, attributed mainly to reduced productivity, lost earnings, accidents, injuries, and absenteeism (Harwood et al., 1998). The majority of studies on drug use and job performance have used information from national surveys of individuals or households to investigate the influence of substance use on one or more contemporaneous measures of labor market performance. Kandel and Davies (1990), for example, used the 1984-85 National Longitudinal Survey of Youth (NLSY), a longitudinal survey of the labor market experiences of young adults, to investigate the effects of cigarette, alcohol, marijuana, and cocaine use on employment. Their results suggest that illicit drug use had negative effects on job mobility, employment gaps, and duration of unemployment. Gill and Michaels (1992) examined the effects of drug use on employment using data from the 1980 and the 1984 NLSY. Their results indicated that drug users were less likely to be employed than nondrug users. However, they found that hard drug users, primarily white men, did not show a reduced probability of employment. Register and Williams (1992) used information from the 1984 NLSY to estimate a labor supply model similar to that used by Gill and Michaels (1992). Specifically, they examined the effects of marijuana and cocaine use on employment and found a negative relationship between marijuana use and the probability of being employed. However, they found no significant relationships between cocaine use and the probability of employment. Kaestner (1994b) also used data from the NLSY and performed both a cross-sectional and a longitudinal analysis of the effects of illicit drug use on labor supply. The cross-sectional estimates for 1984 and 1988 suggested that illicit drug use had significant negative effects on labor supply. To account for the presence of important unobserved individual characteristics, such as the level of lifetime utility, Kaestner formed a limited panel of data from the two cross-sections of 1984 and 1988. Contrary to the cross-sectional results, the longitudinal analysis found that illicit drug use did not have a significant adverse effect on the incidence or quantity of work. Zarkin et al. (1998) used the NHSDA to explore the relationships between young men's hours worked and five categories of substance use: marijuana use, cocaine use, cigarette use, alcohol use, and the use of other drugs, such as heroin, hallucinogens, and inhalants. Using 1991 data, they found few significant relationships between substance use and the number of hours worked by young men in the past month. Another representative study in this group used the 1997 NHSDA data (French et al., 2001). Their results indicated that regardless of gender, chronic drug use was negatively related to employment. However, the relationship between chronic drug use and labor force participation was significant for males but not for females. French, Zarkin, and Dunlap (1998) is one of the few studies that did not rely on large national data sets. These authors used a proprietary database of approximately 1,600 employees at six work sites to examine the relationships between illicit drug use and absenteeism. Absenteeism was defined as days absent from work during the past 12 months. The authors found predominantly insignificant relationships between drug use and absenteeism for both men and women. Another study by French and colleagues (French et al., 2001) used self-reported data from two work sites (hospital and school district) and examined the relationship between various measures of substance use (cigarette, alcohol, and illicit drug use) and absenteeism. …