Full Citation
Title: The Marijuana Policy Impact on Labor Productivity
Citation Type: Miscellaneous
Publication Year: 2017
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Abstract: Public approval rates for marijuana legalization in the United States have been rising dramatically for two decades and presently stand at 60%, pointedly raising the question of whether federal prohibition should continue. Many individual states have made legislative changes to reduce or eliminate penalties for marijuana use, possession, and in some cases sales. Here I investigate whether impacts to labor productivity are visible from these changes. To do so, I construct a panel of state-level data from 2000- 2014 and use a difference-in-difference model to investigate labor productivity overall and also in selected sectors (mining; construction; arts, entertainment, & recreation; and accommodations & food service). I find evidence that marijuana liberalization produces a decrease in overall labor productivity, but not evenly across sectors, and that the effect is spread over several years and slightly delayed. The average effect is a decrease in productivity peaking at about $1,300 per employee (1.3%) in the year following the policy change.
User Submitted?: No
Authors: Albino, Dominic, K
Publisher: Department of Economics, University of Connecticut
Data Collections: IPUMS USA
Topics: Health, Labor Force and Occupational Structure, Other
Countries: United States