Economic Crisis, Unemployment and Illegal Drug Consumption in Spain

[Abstract] Purpose – The purpose of this paper is to analyse the association between drug consumption and unemployment. This paper also studies the differential association between these variables in both the preand current-crisis periods. The results are compared in an attempt to verify that the population of users is more vulnerable in terms of how likely they are to get and hold down a job in the labour market. Design/methodology/approach – Matching methods and microdata from the Survey on Alcohol and Drugs in Spain, EDADES are used. The use of these methods on the estimates carried out prove to be particularly effective in reducing treatment-selection bias. The authors’ interest is also to analyse the differential association between the interest variables in both the pre- and current-crisis periods. For this purpose, the authors also use the differences-in-differences (DID) estimation method between the two periods to check if the impact of drug use on unemployment depends on the economic context. The estimations are compared in an attempt to verify that the population of users is less likely to attain and hold down a job in the labour market than non-drug users. Findings – The results obtained in the current study are consistent with the hypothesis that drug use decreases an individual’s capacity and availability when he or she is trying to enter the labour market. In both 2007 and 2013, drug users were more likely to be unemployed, regardless of the type of drug. Differences in the probability of being unemployed intensify during an economic crisis. In light of these results, it is possible to conclude that the negative effect of drug consumption on an individual’s employability is increased during periods of economic recession. Research limitations/implications – The study presented here has some limitations. Firstly, crosssectional data were used to examine the causal relationship between consumption and employment. In this sense, the results are susceptible to bias. The unavailability of longitudinal data on the same individual made it impossible for the researchers to consider periods of abstinence, the duration of periods of consumption and how this consumption affected an individual’s productivity and his or her working situation. Another limitation is that certain relevant unemployment variables may have been omitted. Among the variables that affect an individual’s labour participation is the existence of sources of income as an alternative to market salaries. With state subsidies, income from illegal activities and money sent by family or friends, an individual may decide not to work. This problem could be mitigated if omitted variables operate in a similar way throughout both of the periods examined. Social implications – Given the results obtained in this paper, the authors believe that public policy conclusions should be mainly concerned with the importance of implementing proactive employment policies, along with family support programmes and a greater role for primary care among the people with the highest risks of exclusion. Health treatment should go jointly with measures that make it easier for individuals to enter the workforce. These steps would only be possible with an improved level of education and more complete professional profiles, to increase motivation when individuals seek employment. Originality/value – This study could make various contributions to the existing body of evidence. In the authors’ knowledge, this is the first attempt to document the effect of the economic crisis on the employability of the drug-using population in contrast with the general population. Moreover, a methodology is presented that provides an alternative to those used in earlier studies, in terms of reducing treatment-selection bias. At the same time, the use of a DID estimation method between pre- and current-crisis periods allow us to check if the impact of drugs consumption on unemployment depends on the economic context.Ministerio de Ciencia e Innovación de España; ECO2013-4821

Identifying the impact of the business cycle on drug-related harms in European countries

[Abstract] Background: The evidence resulting from the analysis of the association between economic fluctuations and their impact on the substance use is mixed and inconclusive. Effects can be pro-cyclical (drug-related harms are predicted to rise when economic conditions improve), counter-cyclical (drug-related harms are predicted to rise in bad economic times) or unrelated to business cycle conditions as different transmission mechanisms could operate simultaneously. Methods: The main aim of this study is to assess, from a macroeconomic perspective, the impact of economic cycles on illegal drug-related harms in European countries over the 2000-2020 period. To this end, the regime dependent relationship between drug-related harm, proxied by unemployment, and the business cycle, proxied by overdose deaths will be identified. Applying a time dynamic linear analysis, within the framework of threshold panel data models, structural-breaks will also be tested. Results: The relationship between economic cycles (proxied by unemployment) and drug-related harms (proxied by overdose deaths) is negative, and therefore found to be pro-cyclical. One percentage point in the country unemployment rate is predicted to reduce the overdose death rate by a statistically significant percentage of 2.42. A counter-cyclical component was identified during the 2008 economic recession. The threshold model captures two effects: when unemployment rates are lower than the estimated thresholds, ranging from 3.92% to 4.12%, drug-related harms and unemployment have a pro-cyclical relationship. However, when unemployment rates are higher than this threshold, this relationship becomes counter-cyclical. Conclusions: The relationship between economic cycles and drug-related harms is pro-cyclical. However, in sit uations of economic downturns, a counter-cyclical effect is detected, as identified during the 2008 economic recession.This paper is based on work supported by the funding of the European Monitoring Centre for Drugs and Drug Addiction (EMCDDA). Contract number: CT.21.HEA.0110.1.0. Emma Iglesias has also obtained financial support from the Spanish Ministry of Science and Innovation, project PID2022-137923NB-I00, and from Xunta de Galicia, project ED431C 2020/26.European Monitoring Centre for Drugs and Drug Addiction; CT.21.HEA.0110.1.0Xunta de Galicia; ED431C 2020/2

The contribution of publicly provided health to growth and productivity

The aim of this paper is to analyze the effect of public health expenditure on productivity. We develop an extension of the augmented Solow model, which includes education and health as a means of explaining productivity. We run conditional convergence regressions for OECD countries, in order to verify the extent to which government consumption and government investment in health enters into the model explaining productivity. The major conclusion of this research is that government consumption in health has consistently positive effects with respect to productivity, while government investment has no effect on productivity.  Este trabalho analisa o efeito do gasto público em saúde sobre a produtividade. Para isso desenvolvemos uma extensão do modelo ampliado de Solow, considerando uma medida ampla de capital humano, que abrange tanto a educação como a saúde, como determinantes do crescimento econômico e da produtividade. Estimamos diferentes regressões de convergência para os países da OCDE, objetivando verificar em que medida o gasto público em consumo e em investimento em saúde influencia a produtividade, mantendo as características neoclássicas. Os resultados revelam que o gasto de consumo em saúde apresenta efeitos positivos sobre a produtividade, enquanto o gasto de investimento em saúde não produz o mesmo efeito positivo

Equilibrio de largo plazo y composición de la demanda: un análisis del modelo Pasinetti-Morishima

En el presente artículo consideramos un sistema de producción con dos categorías de ahorradores: trabajadores y capitalistas de modo que se establece una frontera distributiva entre salarios y beneficios asociada a una determinada tecnología. Se determina la tasa máxima de crecimiento relacionada con el vector de procesos activos elegidos dentro de las posibilidades técnicas del sistema. Partiendo de un análisis sraffiano todas las conclusiones se derivan del intervalo post-keynesiano de las posibilidades distributivas. El desarrollo del sistema dual muestra que la demanda se verá acotada por las necesidades de inversión aunque los consumidores sean libres para establecer un ordenamiento de sus preferencias sujeto a esta restricció

Income variation, endogenous population growth and health subsidy

This paper presents a fertility choice model in which the mortality rate is also endogenously determined and health expenditure provides utility to individuals as well as affects the mortality rate. The analysis shows that the model predictions agree with the empirical evidence on the relationship between demography trends and economic development. Public expenditure represents a large amount of total expenditure on health care in many countries. Thus, we also study the effects that introducing a subsidy to health expenditure has on economic and demographic variables. These effects are found to depend on the way the subsidy is financed.Este trabajo presenta un modelo de elección de la fertilidad en el que la tasa de mortalidad se determina endógenamente y el gasto sanitario proporciona utilidad al individuo además de influir sobre la tasa de mortalidad. El análisis muestra que las predicciones del modelo concuerdan con la evidencia empírica sobre la relación entre tendencias demográficas y desarrollo económico. El gasto público representa una gran proporción del gasto sanitario total en muchos países. Por ello, también se estudian los efectos de un subsidio al gasto sanitario sobre las variables económicas y demográficas, que dependerán de la fuente de financiación del subsidio

Impacto de los programas de transferencia condicionada de renta sobre el estado de salud: el Programa Bolsa Familia de Brasil

Las transferencias condicionadas de renta se están consolidando como instrumento estándar para la reducción de la pobreza. El Programa Bolsa Familia implementado en Brasil es el de mayor envergadura de este tipo de programa en el mundo. La evaluación de su impacto ofrece algunas indicaciones extrapolables a otros países. En este artículo se pone en evidencia la falta de resultados de este programa en términos de estado de salud y de modificación de conductas no saludables. la existencia de barreras por el lado de la oferta aparece como la limitación más importante para la consecución de mejores resultados en este ámbito. Sin embargo, el impacto positivo del programa sobre la educación y la reducción de la pobreza permite predecir mejoras en el estado de salud de la población a largo plazo