The Effect of Awarding Disability Benefits on Opioid Consumption

Abstract

Strong empirical evidence points towards a significantly higher prevalence of opioid consumption among people receiving disability benefits (DB) than in the general population of the United States. However, no previous research established a causal relationship between the decision to award DB to applicants and their subsequent opioid use. We aim to contribute towards filling this gap. There are channels through which awarding DB may both increase and depress opioid consumption, and thus, ex ante, the sign of a potential causal relationship is ambiguous. To correct for the treatment endogeneity, since an individual's age at the time of the decision on an application impacts discontinuously at certain age cutoffs the award decision, we employ a fuzzy Regression Discontinuity model with three age cutoffs used for identification. We find that awarding DB increases the likelihood of using opioids by about 27-30 percentage points. This suggests that the positive association between DB receipt and opioid consumption is likely to be causal.