Does the economy affect teenage substance use?

Abstract

This research examines how teenage drug and alcohol use responds to changes in the economy. In contrast to the recent literature confirming pro-cyclical alcohol use among adults, this research offers strong evidence that a weaker economy leads to greater teenage marijuana and hard-drug use and some evidence that a weaker economy also leads to higher teenage alcohol use. The findings are based on logistic models with state and year fixed effects, using teenagers from the NLSY-1997. The evidence also indicates that teenagers are more likely to sell drugs in weaker economies. This suggests one mechanism for counter-cyclical drug use - that access to illicit drugs is easier when the economy is weaker. These results also suggest that the strengthening economy in the 1990s mitigated what would otherwise have been much larger increases in teenage drug use.

How Does Youth Cigarette Use Respond to Weak Economic Periods? Implications for the Current Economic Crisis

“…A more targeted unemployment rate for teenagers and young adults is not available at the state-month level; and, if it were available, it would be subject to much greater measurement error than state overall unemployment rates. Regardless, Arkes (Arkes 2007) shows how teenage unemployment follows the same patterns, with more volatility, as the overall unemployment rate. Unemployment rates for young adults would likely follow similar patterns as well.…”

“…This has an advantage over using a linear or quadratic time trend in that any year-specific divergences from the trend in the unemployment rate and cigarette use that are incidentally correlated could affect the estimates. Using survey-year and state dummy variables, as in this approach, is the standard method to determine how changes in the economy affect various health behaviors (Arkes 2009, Dee 2001, Ruhm 1995, Ruhm 2000, Ruhm and Black 2002, Arkes 2007. By controlling for state and time, the estimated effects of the unemployment rate represent how within-state changes in the economy affect within-state changes in cigarette use.…”

“…Not including any mediating variables produces a reduced-form estimate for the total effect of the economy. This also means that other types of substance use (alcohol and drug use) should be excluded because they are affected by the economy and could be complements to cigarette use (Arkes 2007). …”

“…1 While this could be due to reversion to the mean, it also may be attributable to the weak economy (along with its weak labor market) during the current financial crisis. Teenage drug and alcohol use have been found to be higher when the economy is weaker-and the unemployment rate is higher (Arkes 2007). Youth cigarette use may follow similar patterns.…”

“…While using state-level aggregate data would be ideal, there is no such data available (at least that is measured with an adequate level of precision). Thus, previous social science articles on how the economy affects various health behaviors have relied on individual-level data with state identifiers (Arkes 2007, Arkes 2009, Dee 2001, Ruhm 1995, Ruhm 2000, Ruhm and Black 2002. This paper follows the same methods and uses individual-level longitudinal data to examine how changes in the economy affect youth cigarette use.…”