Macroeconomic aspects of substance abuse: diffusion, productivity and optimal control

Authors

Amnon Levy, University of WollongongFollow
Frank Neri, University of WollongongFollow
D. Grass, Vienna Universit y of Technology, Austria

RIS ID

16049

Publication Details

This article was originally published as Levy, A, Neri, F and Grass, D, Macroeconomic aspects of substance abuse: diffusion, productivity and optimal control, Macroeconomic Dynamics, 10, 2006, 145-164. Copyright Cambridge University Press. Original article available here.

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.