The Deadly Cycle of Opioids and Unemployment: Eco Research Wrap

(Bloomberg) -- America’s opioid epidemic may take a deeper toll on the Rust Belt than previously envisioned, as new research indicates drug abuse that results from manufacturing losses makes it harder for blue-collar workers to find and keep future jobs.

And to make matters worse, there is no simple fix, considering trade barriers erected to protect U.S. factories may do little to boost hiring, according to the research conducted at the University of Chicago. Other academic work in this week’s wrap focuses on the role of cultural differences in monetary policy and how access to health insurance impacts the prevalence of student loans.

Check this column each Tuesday for new and pertinent economic research from around the world.

Opioids and the erosion of manufacturing

The Transformation of Manufacturing and the Decline in U.S. Employment
Published March 2018
Available on the National Bureau of Economic Research website

U.S. manufacturers shed about 5.5 million employees on net from 2000 to 2017, with less-educated Americans suffering the most as factories increasingly sought out skilled workers, according to research by Kerwin Kofi Charles, Erik Hurst and Mariel Schwartz. The job losses may have contributed to a rise in opioid abuse in hard-hit areas, making it even more difficult for the unemployed to get a second chance. “Even if those individuals who are taking drugs want to find a job, employers may screen them out,” according to the paper.

But erecting trade barriers to protect manufacturers may not help much, as factories shielded from global trade would probably use more modern, capital-intensive technologies that would do little to boost demand for less-educated workers, the research shows.

Weekly demo(graphic): the bees are back

Economic Effects and Responses to Changes in Honey Bee Health
Published March 2018
Available on U.S. Department of Agriculture website

Winter losses of managed honeybees have surged since 2006, when disappearances led scientists to coin the phrase “colony collapse disorder” and raised concerns that America was losing a key link in its agricultural and food supply chain. But new research from the USDA shows the number of U.S. honeybee colonies remained flat or rose from 1996 to 2016, as bee populations bounced back in warmer months and beekeepers took steps to keep the insects thriving.

Monetary policy: lost in translation

Cultural Differences in Monetary Policy Preferences
Published February 2018
Available on the Swiss National Bank’s website

A population’s cultural background -- in addition to its economic history -- can shape its tolerance for inflation, according to research by Adriel Jost at the Swiss National Bank. Jost came to the conclusion by looking at regions in Switzerland with different cultures and languages, finding that “decisions are based on different public preferences, and these preferences are, at least partly, based on different cultural backgrounds.”

That’s important because central banks can’t implement policies that are out of touch with public preference, as politicians will only support the independence of monetary authorities if voters back the concept as well, Jost writes.

Health insurance and No. 2 pencils

Do Expansions in Health Insurance Affect Student Loan Outcomes?
Published March 28
Available on Federal Reserve Bank of New York website

Increased health-care coverage may prompt more Americans to use student loans, and result in them taking longer to start repaying their debts, according to researchers at the New York Fed.

The researchers focused on higher rates of coverage provided under the Affordable Care Act, which is known as Obamacare. While they didn’t have a definitive reason for their findings, they speculated that insured students may be financing more expensive education, or pursuing studies for longer and delaying repayments as a result.

To contact the reporter on this story: Randall Woods in Washington at rwoods13@bloomberg.net.

To contact the editors responsible for this story: Brendan Murray at brmurray@bloomberg.net, Scott Lanman

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