ABSTRACT
In this chapter we consider the impact of illicit drug use on labour market outcomes. This is a growing area of social research, encouraged in part by the availability of suitably large data-sets in recent years. The impact of alcohol consumption on earnings has received particular attention, but there is also concern about the effects of illicit drug use on labour market outcomes. Culyer (1973) originally highlighted this issue whilst considering whether drug use should be a genuine concern for social policy makers. This concern typically centres on the productivity of drug users. Since the work of Becker (1964) and Grossman (1972) there has been a common belief among economists that a strong relationship exists between health and earnings. Apart from genetic and dietary factors that might affect this relationship, economists have been concerned about the impact of substance use or abuse on labour market outcomes, which can be considered to be an indirect effect of this consumption upon physical and mental health. If drug users are more likely to experience chronic absenteeism and frequent spells out of the labour market, then assuming that workers receive the value of their marginal product as pay, this reduced productivity will manifest itself through lower wages.
