Prescription Abuse Drops When States Adopt Mandatory Monitoring

(Bloomberg) -- Programs that monitor doctor prescribing and pharmacist dispensing could help to fight against drug addiction, new research shows, and with and especially strong effect for young adults. 

America's raging opioid epidemic sprung from the over-prescription of painkillers,  and it's causing a heavy and climbing death toll and impairing labor-market readiness, so it's important that this policy response seems to be effective. The paper assessing it leads this week's economic research wrap, which also takes a look at how Europe prioritizes immigration, Americans' faith in the Federal Reserve, and how the U.S. heartland has responded to manufacturing shocks. Check back each week for recent findings from around the world. 

Beating back prescription abuse

As American states deal with rampant opioid abuse, many have implemented prescription drug monitoring programs to track what doctors are giving out, to whom, and how often. The idea is that by better communicating, doctors and pharmacies can prevent over-prescribing that fuels addiction.

Previous research has showed that for all their promise, monitoring programs have limited or inconsistent benefits. That may have to do with adoption, new research suggests: in many states, prescribers and doctors don't regularly query the program before writing prescriptions. But starting in 2007, some states began to require prescribers, dispensers or both to check the database prior to giving out the substance. That seems to have made a difference: Bentley University's Dhaval Dave and coauthors find that the mandatory programs drive down abuse. In fact, adoption of mandatory access provisions is associated with about 5.8 fewer addiction treatment program admissions per 10,000 individuals ages 18-24, and 3.2 fewer admissions for those 25 to 44 years old.

Interestingly, the authors find that broader program use comes alongside lower cocaine and marijuana treatment admissions, though the effect on admissions for heroin is not statistically significant.  

Mandatory Access Prescription Drug Monitoring Programs and Prescription Drug Abuse
Published June 2017
Available on the NBER website

European immigration views 

In a world rocked by populism, public views on immigration have taken on a new importance. Looking at opinion alone paints an incomplete picture, the University of Essex's Timothy Hatton writes in a recent paper, and can be fleshed out by also taking into account salience — how much weight an individual places on immigration as a policy issue.

At a national level, immigration preferences are influenced by the immigrant stock and the share of social benefits in GDP, he finds. Salience, on the other hand, depends on short-run shocks. For instance, when the population is focused on unemployment, immigration slips in importance rankings. "The notion that immigration may be crowded out of the political agenda by other issues is widely recognized but it has not been sufficiently taken into account," Hatton writes.

Prescription Abuse Drops When States Adopt Mandatory Monitoring

Public Opinion on Immigration in Europe: Preference versus Salience
Published June 2017
Available on the IZA website

Losing faith in the Fed? 

Household inflation expectations have remained near historical lows even as oil prices have have stabilized, based on the University of Michigan Survey. New Kansas City Fed research takes a look at why that's happening, examining how respondent's expectations about longer-term inflation compare with their views about how monetary policy-makers have handled the economy. The logic? "If households with low inflation expectations perceive recent inflation outcomes as inconsistent with the committee’s longer-run inflation objective, then we assume that these households would give policymakers low marks on their handling of the economy." 

Somewhat surprisingly, they find that households with lower inflation expectations tend to think the government is doing a better job managing unemployment and inflation than households with high inflation expectations. In fact, the number of households that believe the government is doing a “good job” has risen in recent years. The authors think that might provide something of a salve to policy makers worried about deteriorating expectations. 

Does the Recent Decline in Household Longer-Term Inflation Expectations Signal a Loss of Confidence in the FOMC?
Published June 21
Available at the Federal Reserve Bank of Kansas City website

Factories in the Heartland

American manufacturing towns scattered across the Rust Belt suffered two major economic shocks, one from 1979 to 1983 and one from 2001 to 2010, and new research from the Cleveland Fed examines both episodes. Employment losses spread well beyond the manufacturing sector in both cases, the researchers found. Even though the heartland diversified away from manufacturing by the time the second shock hit, it still experienced large job losses — and the hit to income proved larger and more persistent.

"This an important issue to examine further because it implies a much less sanguine take on the nature of regional evolution the industrial heartland, despite the ongoing diversification of the region,"  senior vice president Mark Schweitzer writes. 

Manufacturing Employment Losses and the Economic Performance of the Industrial Heartland
Published June 2017
Available on the Federal Reserve Bank of Cleveland website

To contact the author of this story: Jeanna Smialek in Washington at