Opioid abuse and labor investment efficiency

Opioid abuse is considered a public health emergency in the United States (US) and has incurred huge economic costs. Our study provides initial evidence about the relationship between opioid abuse and corporate labor investments. Through analyzing a sample of US firms (from 2002 to 2019), we find that opioid abuse is negatively associated with an efficient investment in labor. We present suggestive evidence that opioid abuse affects labor investment efficiency through workplace accidents and injuries, and labor productivity. Additional analyses reveal that the negative impact of opioid abuse on labor investment efficiency is more pronounced for firms in which employees earn a low income, and for firms in the states where fewer treatment facilities offer opioid treatment programs. Given the importance and impact of opioid abuse in the US, our findings should be of great interest to investors, directors, managers, and public policymakers.