Does Marijuana Legalization Affect Work Capacity? Evidence from Workers’ Compensation Benefits
We study the effect of state recreational marijuana laws (RMLs) on workers’ compensation (WC) benefit receipt among adults 40-62 years. We find that WC receipt declines in response to RML adoption both in terms of the propensity to receive benefits and benefit amount. We estimate complementary declines in non-traumatic workplace injury rates and the incidence of work-limiting disabilities. We offer evidence that the primary driver of these reductions is an improvement in work capacity, likely due to access to an additional form of pain management therapy.
Authors listed in alphabetical order. All authors contributed equally to the manuscript. Powell gratefully acknowledges funding from NIDA (P50DA046351). We thank seminar participants at Indiana University and the Workers’ Compensation Research Institute for helpful feedback. We also thank Alex Hollingsworth, Melissa McInerney, John Mullahy, Sarah Stith, and Shyam Raman for helpful comments. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.