Local Public Resources and Innovation: Evidence from the Opioid Crisis
(with Kimberly Cornaggia, Kevin Pisciotta, and Zihan Ye)May 7, 2022 draft at SSRNAbstract
Local opioid abuse reduces net worker inflows, taxable income, high skilled labor, cor- porate and aggregate innovation, new business creation, and job growth from start-ups in affected areas, holding socioeconomic conditions constant. Changes in house prices, parks and recreation expenditures, and dollar store establishments indicate a decline in local resources and amenities as a channel for these negative effects of opioid abuse on human capital and innovation. Our results are robust across diff-in-diff and IV identifi- cation strategies. We conclude that local public health problems drain local resources, drive out talent, and lead to long-term reductions in innovative capacity in affected communities.