Drug use, drug abuse, and labour market outcomes

This paper examines the relationship between illicit drug use and labour market success, and in doing so addresses two shortcomings of the previous literature. First, unlike many previous analyses, ours accounts for differences in intensity of use using clinically based diagnostic measures. Second, while recent studies focus only on young adults, we analyze a prime-age (30-45-year-olds) sample as well. Our results indicate that these differences are important. Similar to previous studies, we find evidence of a positive relationship between drug use and income for young workers. However, we also find some evidence of lower incomes for young workers reporting daily use of illicit drugs. For prime-age men, we find strong evidence that problematic drug use (as indicated by either a diagnosis of pathological use or dependence or by daily use) is negatively related to income. We also find a negative relationship between problematic use and employment among prime-age, but not younger, men.