Cite this article

NIDA. (1998, September 1). The Economic Costs of Alcohol and Drug Abuse in the United States - 1992. Retrieved from https://archives.drugabuse.gov/publications/economic-costs-alcohol-drug-abuse-in-united-states-1992

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Chapter 5: Productivity Losses

Synopsis

Alcohol and drug abuse cost society an estimated $176.4 billion during 1992 as a result of lost productivity resulting from premature death and illness among alcohol and drug abusers, associated crime-related costs of alcohol and drug abusers, time spent by alcohol and drug abusers in residential treatment, and developmental disabilities among fetal alcohol syndrome (FAS) survivors. An estimated $107 billion in overall productivity losses is attributable to alcohol abuse, and $69.4 billion is attributable to drug abuse (see table 5.1). The crime-related productivity losses include the value of lost potential productivity resulting from the following: (1) victimization by crime, (2) incarceration for a criminal offense, and (3) time spent by heroin and cocaine addicts in criminal activities (crime careers) rather than in legal employment.

The analysis of lost productivity in 1992 produced the following findings:

  • More than 132,000 deaths were attributable to alcohol and drug abuse in 1992. The estimated loss of productivity resulting from these deaths was $45.9 billion (using a 6-percent rate of discount), including $31.3 billion for the 107,000 premature deaths attributable to alcohol abuse and $14.6 billion for the 25,000 deaths attributable to drug abuse.
  • Alcohol and drug abuse can interfere with an individual's productivity and employment. Shortfalls in productivity and employment among individuals with alcohol and drug abuse disorders accounted for estimated losses of $80.9 billion in 1992, of which $66.7 billion is attributed to alcohol abuse and $14.2 billion is attributed to drug abuse.
  • The estimated loss of potential productivity because of long-term residential treatment and short-term hospitalization of alcohol and drug abusers was $3 billion in 1992; drug problems cost $1.5 billion and alcohol problems, $1.5 billion. This estimate is somewhat conservative because it excludes time for hospitalization and recuperation associated with treatment for medical consequences of problem alcohol consumption.
  • Adults who were born with FAS have mental impairments, which are associated with earnings lower than for adults who were not born with FAS. At a 1-in-1,000 incidence rate among adults, this results in an additional $990 million in lost earnings, all of which are alcohol caused.
  • Victims of crime often experience loss of work time with the associated economic loss. An estimated 2.5 million alcohol-related victimizations (about 60 percent were assaults) occurred in 1992, with estimated costs of $1 billion. About 8.2 million drug-related victimizations occurred (about 75 percent were larcenies), with estimated victim work losses of about $2 billion.
  • About 600,000 person-years of time spent in prisons and jails in 1992 (about 45 percent of the total time served in these facilities in 1992) is attributed to alcohol- (160,000 person-years, costing $5.4 billion) or drug-related crime (440,000 person-years, costing $17.9 billion).

The approximately 1.7 million "heavy" drug users often forsake the legitimate economy for the illicit drug trade or for careers in consensual (gambling and prostitution) or acquisitive (theft) crime, with losses of legitimate productivity of $19.2 billion.

Table 5.1: Lost Potential Productivity Due to Alcohol and Drug Abuse, 1992
Table 5.1: Lost Potential Productivity Due to Alcohol and Drug Abuse, 1992 (millions of dollars)
Lost Earnings due to: Total Alcohol Drug
Premature death (mortality) $45,902 $31,327 $14,575
Alcohol and drug abuse illness (morbidity) $80,911 $66,706 $14,205
Institutionalized/hospital populations $2,990 $1,513 $1,477
Fetal alcohol syndrome victims $990 $990 NA
Victims of crime $3,071 $1,012 $2,059
Incarceration $23,356 $5,449 $17,907
Crime careers $19,198 - $19,198
Total $176,418 $106,997 $69,421

Note: Components may not sum to totals because of rounding. Mortality estimates use the present discounted value of expected lifetime productivity, discounted by 6 percent.

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