Illicit drug use and labour market achievement: evidence from the UK

Ziggy Macdonald,Stephen Pudney

doi:10.1080/00036840010014454

Abstract

This study, using data from the British Crime Survey (BCS), examines the effect of drug use on occupational achievement. It starts by attempting to overcome the identification problem that results from the limited set of drug use questions presented in the BCS. Taking this into account, and allowing for the endogeneity of drug use in equations for unemployment and labour market outcomes, that a mild positive association with ‘soft’ drugs and occupational achievement is observed that diminishes with age. This relationship holds for males but not for females. In contrast, it is also found that past use of ‘hard’ drugs significantly increases the likelihood of current unemployment, although it appears to be unrelated to occupational success, conditional on achieving employment.

Highlights

The economic foundations of anti-drug policy rest on the belief that drug use imposes serious costs on individuals and on society as a whole
This reduced labour productivity is usually seen to result from the negative health consequences of drug use which can lead to chronic absenteeism and frequent spells out of the labour market
Assuming that workers receive the value of their marginal product as pay, the reduced productivity level of drug users would manifest itself through lower wages

Summary

Introduction

The economic foundations of anti-drug policy rest on the belief that drug use imposes serious costs on individuals and on society as a whole. The latter external costs include an increased burden on publicly provided health care and the impact of acquisitive crime linked to drug use They create a divergence between the marginal private costs of the individual decision maker (the drug user) and the marginal social costs borne by society as a whole, and give rise to a strong case for government intervention. The primary concern of this traditional view is that reduced labour market experience of drug users will result in a lower aggregate level of human capital accumulation, tending to reduce overall productivity and living standards This reduced labour productivity is usually seen to result from the negative health consequences of drug use which can lead to chronic absenteeism and frequent spells out of the labour market. Assuming that workers receive the value of their marginal product as pay, the reduced productivity level of drug users would manifest itself through lower wages

Results

Discussion

Conclusion