Economic Downturns and Substance Abuse Treatment: Evidence from Admissions Data
NBER Working Paper No. 19115
This study investigates the effect of economic downturns on substance abuse treatment admissions using data from the Treatment Episodes Data Set between 1992 and 2010. Given the differences between alcohol and illicit drugs, we separately examine these two classes of substances. Changes in admissions may be driven by both demand and supply side determinants of substance abuse treatment, and we include supply side proxies in our regressions to isolate the role of demand. We find that admissions for both alcohol and illicit drugs decrease in downturns. Unconditional quantile regressions reveal that the relationship varies across the admissions distribution: results are driven by states with low admissions. Our findings shed new light on the relationship between economic downturns and substance abuse, and have implications for public health policy and prioritization of government spending.
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