Did Medicaid Fuel the Early Opioid Epidemic? An Investigation Using State Policies
Abstract: I examine the role of Medicaid in fueling the early opioid epidemic, between 1996 and 2010. To do so, I construct a novel database of Medicaid policy reforms in the late 1990s and 2000s, a period marked by substantial changes to program eligibility, and I link these reforms to a range of data on opioid sales, abuse treatment, and use-related mortality. To address endogeneity of program eligibility, my empirical strategy uses two simulated instrumental variables that isolate quasi-exogenous variation in eligibility within and across states. Regression estimates indicate that Medicaid expansions contributed to significantly higher opioid sales, though effect sizes are relatively small and explain only a fraction of the documented rise in sales over this period. I then show that these expansions also resulted in a significant increase in opioid abuse treatments, an effect I argue is more consistent with greater abuse than improved treatment access. Estimates of program impacts are smaller in states that more tightly regulated prescription access. Perhaps surprisingly, these policy reforms do not seem to have significantly increased opioid-related mortality. These findings provide novel evidence on the causal drivers of the opioid epidemic, and they offer insights for the broader debate about tradeoffs in the design of health insurance policy.
The Impact of COVID-19 on Emerging Markets Economies’ Financial Conditions
Abstract: We explore the role of COVID-19 indicators in changing financial variables among Emerging Market Economies (EMEs). Using panel regressions, we find that lockdown stringency has the effects of depreciating currencies, widening credit spreads, and pushing down equity prices in a sample of 22 EMEs. These results underscore the broader dangers posed by the COVID-19 pandemic to already vulnerable countries.