Five Must-Read Studies From the Big Economics Confab: Eco Pulse

Economists descended on Philadelphia last weekend for an annual conference that’s basically wonk utopia.

Central bankers, Nobel laureates and the profession’s elite professors debated the merits of math-heavy models in packed conference rooms while Ph.D. job market candidates vied for jobs down the hall. The American Economic Association confab’s program spanned three days and hundreds of topics, with major themes ranging from the death of the Phillips Curve to how women are treated in the field. And amid all that hustle and bustle, even the most dedicated econ-nerd might have missed a paper or two.

Fortunately, we’ve got your back. Here are five of our favorite, from a look at wages and the opioid crisis to an analysis of how the Fed responds to stock market changes. This is a special edition of our weekly Eco Pulse column, which you can check each Tuesday for new and pertinent economic research from around the world.

Wage and Employment Growth in America’s Drug Epidemic: Is All Growth Created Equal?
Published December 2017
Available at the AEA website

It turns out wage stagnation may be playing into the opioid crisis. As a recap, previous research has made is clear that unemployment and trade shocks are associated with an increase in overdose deaths. This new paper, from Ohio State’s Michael Betz and Lauren Jones, finds that in rural areas, 5 percent faster wage growth at the lowest-paying tier of the industry distribution could cut the drug overdose death rate by 10 percent. In metro areas, faster wage gains in middle- and bottom-tier industries would come with fewer overdose deaths. “In rural areas, local economic conditions are not affecting overdose rates primarily through work availability, but rather through wage growth,” the authors write. “This finding is a new piece of the story and suggests that the unemployment rate may not fully capture the macroeconomic conditions that are important predictors of overdose.”

Perhaps most unexpectedly, stronger employment growth in top-tier industries causes more overdose deaths in metro counties and among men in rural areas, according to the authors. Why? It could be that inequality of opportunity is weighing on people, or that working increases access to employer-provided health insurance, increasing prescription opioid supply.