The effects of recreational marijuana legalization on employment and earnings

Dhaval M. Dave (), Yang Liang (), Caterina Muratori () and Joseph J. Sabia ()
Additional contact information
Dhaval M. Dave: Bentley University, NBER & IZA
Yang Liang: San Diego State University
Caterina Muratori: San Diego State University
Joseph J. Sabia: San Diego State University & IZA

Journal of Population Economics, 2025, vol. 38, issue 2, No 11, 41 pages

Abstract: Abstract Despite nearly 70 percent of the American public supporting legalization of recreational marijuana, opponents argue that increased marijuana use may diminish motivation, impede cognitive function, and harm health, each of which could adversely affect adults’ economic well-being. This study is the first to explore the impacts of recreational marijuana laws (RMLs) on employment and wages. Difference-in-differences estimates show little evidence that RMLs adversely affect labor market outcomes among most working-age individuals. Rather, our estimates show that RML adoption is associated with an increase in agricultural employment, consistent with the opening of a new licit market. A causal interpretation of our findings is supported by event-study analyses using dynamic difference-in-differences estimates designed to expunge bias due to heterogeneous and dynamic treatment effects, and alternative policy estimates generated using a synthetic control design.

Keywords: Recreational marijuana laws; Labor market outcomes; Employment; Wages (search for similar items in EconPapers)
JEL-codes: H71 I12 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s00148-025-01100-8 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:jopoec:v:38:y:2025:i:2:d:10.1007_s00148-025-01100-8

Ordering information: This journal article can be ordered from
http://www.springer. ... tion/journal/148/PS2

DOI: 10.1007/s00148-025-01100-8

Access Statistics for this article

Journal of Population Economics is currently edited by K.F. Zimmermann

More articles in Journal of Population Economics from Springer, European Society for Population Economics Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().