Jul 23, 2011 News
By Rabindra Rooplall
It has largely been assumed that a slowdown in a country’s economic activity is associated with increased substance use, the 2010 Monitoring Centre for Drugs and Drug Addiction Annual Report noted.
The report pointed out to the fact that the current global financial crisis has prompted serious concerns about health and well-being and the ‘fears that this may be accompanied by an increase in problematic forms of drug use.’
A number of studies have examined the relationship between an individual’s employment status and alcohol consumption. Some studies also found that alcohol consumption falls when a person becomes unemployed.
However, some researchers report increases in alcohol consumption associated with unemployment. The relationship at an individual level is likely to be confounded by whether unemployment is short-term or long-term and may additionally be influenced by the overall unemployment rate for the area.
“Becoming unemployed at a time of strong economic growth may have substantially different psychological and social implications for an individual than losing one’s job when economic growth has slowed,” the report stated.
“The extent to which the society provides social benefits to those unemployed may also be a critical factor. For illicit drugs, increases in poverty are associated with expansion of informal economies: crime, sex work and drug dealing.”
This line of argument posits that alcohol or drug consumption may increase with economic slowdown as people try to cope with the stress of unemployment and poor job prospects.
In addition, with fewer jobs around, some people will have more time on their hands and less to lose from drug consumption. This creates an environment that is ripe for local drug markets to flourish. Finally, harms may increase in association with government austerity measures and reductions in service provision.
According to the report, the economic theory suggests that economic slowdowns are associated with decreased substance use, largely through an income effect. Established substance users tend to use alcohol or drugs more frequently, particularly their favoured drug, with rises in personal income.
It was further disclosed that substance use in the general population tends also to rise with personal income. To the extent that adjustments in a country’s income per capita feed through to personal income, economic slowdown may be associated with lower substance use as people ‘tighten their belts’.
There are a number of papers that provide supporting data for the proposition that at times of economic prosperity, consumption of alcohol increases.
The report underscored that the most convincing research evidence supports a positive relationship between alcohol use and the state of a country’s economy: that is, stronger economic growth is associated with higher alcohol consumption and therefore harms.
A deteriorating labour market is associated with reduced alcohol consumption. This is consistent with economic theory around income and spending power. The results for illicit drug use seem less clear and may be in the reverse direction.
Perhaps more critically, the report noted, is the state of the business cycle might have less relevance for substance use and harm than more proximal factors such as the proportion of the population in poverty, income inequality or the gap between the incomes of the poorest and the richest.
The extent to which these measures are impacted by a recession depends on factors such as the sectors which are most affected by the recession, the government’s policy response to the recession, for example ( job creation and other forms of increased government expenditure vs. an increase in the money supply) and the extent to which the tax and welfare systems cushion the experience.
However, there is also research indicative of increases in alcohol consumption and harm associated with economic decline. Overall, despite conflicting findings, the weight of evidence appears to support decreases in alcohol consumption and alcohol-related harm during times of rising unemployment rates.
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