MACROECONOMIC ASPECTS OF SUBSTANCE ABUSE: DIFFUSION, PRODUCTIVITY AND OPTIMAL CONTROL

Amnon Levy, Frank Neri and Dieter Grass

Macroeconomic Dynamics, 2006, vol. 10, issue 2, 145-164

Abstract: This paper deals with macroeconomic aspects of widespread substance abuse with a reference to illicit drugs as an example. Substance abuse impedes the productivity of the labor force and reduces economic growth. Workers are either nonusers and therefore fully productive, a number of whom are employed by the government in drug-control activities, or users who are only partially productive. Efficient management of the nation's portfolio of workers involves eradicating drug use when initial user numbers are lower than a critical level, but allows user numbers to rise to, and be accommodated at, a stationary level when initial user numbers exceed a critical level.

Date: 2006
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