The effects of recreational cannabis access on labor markets: evidence from Colorado

Recreational cannabis markets possibly increase labor demand through investments in facilities for growing, processing, and retail sales of cannabis, as well as through other industries such as manufacturing, leisure, and hospitality. However, this increase in labor demand may vary substantially acr...

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Autores principales:	Chakraborty Avinandan, Doremus Jacqueline, Stith Sarah
Formato:	article
Lenguaje:	EN
Publicado:	Sciendo 2021
Materias:	cannabis marijuana labor demand manufacturing j21 r11 j3 k00 Economic growth, development, planning HD72-88 Labor. Work. Working class HD4801-8943
Acceso en línea:	https://doaj.org/article/83362c182a8649fca3efc6adf2a274e2
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spelling	oai:doaj.org-article:83362c182a8649fca3efc6adf2a274e22021-12-05T14:11:08ZThe effects of recreational cannabis access on labor markets: evidence from Colorado2193-899710.2478/izajole-2021-0005https://doaj.org/article/83362c182a8649fca3efc6adf2a274e22021-11-01T00:00:00Zhttps://doi.org/10.2478/izajole-2021-0005https://doaj.org/toc/2193-8997Recreational cannabis markets possibly increase labor demand through investments in facilities for growing, processing, and retail sales of cannabis, as well as through other industries such as manufacturing, leisure, and hospitality. However, this increase in labor demand may vary substantially across counties within a state as most states with legal recreational cannabis allow individual counties to ban commercial cannabis sales. Meanwhile, labor supply may change through positive and negative effects from cannabis use. Using county-level Colorado data from 2011 to 2018 and exploiting variation across counties in the existence and timing of the start of dispensary sales, we test for changes in the unemployment rate, employment, and wages, overall and by industry subsector. Consistent with an increase in labor demand, we estimate that the sale of recreational cannabis through dispensaries is associated with a 0.7 percentage point decrease in the unemployment rate with no effect on the size of the labor force. We also find a 4.5% increase in the number of employees, with the strongest effects found in manufacturing. We find no effect on wages. Given the lack of a reduction in labor force participation or wages, negative effects on labor supply are likely limited, in line with the existing literature. The decrease in unemployment, coupled with an increase in the number of employees, indicates that labor demand effects likely dominate effects on labor supply. Our results suggest that policymakers considering recreational access to cannabis should anticipate a possible increase in employment.Chakraborty AvinandanDoremus JacquelineStith SarahSciendoarticlecannabismarijuanalabor demandmanufacturingj21r11j3k00Economic growth, development, planningHD72-88Labor. Work. Working classHD4801-8943ENIZA Journal of Labor Economics, Vol 10, Iss 1, Pp 493-505 (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	cannabis marijuana labor demand manufacturing j21 r11 j3 k00 Economic growth, development, planning HD72-88 Labor. Work. Working class HD4801-8943
spellingShingle	cannabis marijuana labor demand manufacturing j21 r11 j3 k00 Economic growth, development, planning HD72-88 Labor. Work. Working class HD4801-8943 Chakraborty Avinandan Doremus Jacqueline Stith Sarah The effects of recreational cannabis access on labor markets: evidence from Colorado
description	Recreational cannabis markets possibly increase labor demand through investments in facilities for growing, processing, and retail sales of cannabis, as well as through other industries such as manufacturing, leisure, and hospitality. However, this increase in labor demand may vary substantially across counties within a state as most states with legal recreational cannabis allow individual counties to ban commercial cannabis sales. Meanwhile, labor supply may change through positive and negative effects from cannabis use. Using county-level Colorado data from 2011 to 2018 and exploiting variation across counties in the existence and timing of the start of dispensary sales, we test for changes in the unemployment rate, employment, and wages, overall and by industry subsector. Consistent with an increase in labor demand, we estimate that the sale of recreational cannabis through dispensaries is associated with a 0.7 percentage point decrease in the unemployment rate with no effect on the size of the labor force. We also find a 4.5% increase in the number of employees, with the strongest effects found in manufacturing. We find no effect on wages. Given the lack of a reduction in labor force participation or wages, negative effects on labor supply are likely limited, in line with the existing literature. The decrease in unemployment, coupled with an increase in the number of employees, indicates that labor demand effects likely dominate effects on labor supply. Our results suggest that policymakers considering recreational access to cannabis should anticipate a possible increase in employment.
format	article
author	Chakraborty Avinandan Doremus Jacqueline Stith Sarah
author_facet	Chakraborty Avinandan Doremus Jacqueline Stith Sarah
author_sort	Chakraborty Avinandan
title	The effects of recreational cannabis access on labor markets: evidence from Colorado
title_short	The effects of recreational cannabis access on labor markets: evidence from Colorado
title_full	The effects of recreational cannabis access on labor markets: evidence from Colorado
title_fullStr	The effects of recreational cannabis access on labor markets: evidence from Colorado
title_full_unstemmed	The effects of recreational cannabis access on labor markets: evidence from Colorado
title_sort	effects of recreational cannabis access on labor markets: evidence from colorado
publisher	Sciendo
publishDate	2021
url	https://doaj.org/article/83362c182a8649fca3efc6adf2a274e2
work_keys_str_mv	AT chakrabortyavinandan theeffectsofrecreationalcannabisaccessonlabormarketsevidencefromcolorado AT doremusjacqueline theeffectsofrecreationalcannabisaccessonlabormarketsevidencefromcolorado AT stithsarah theeffectsofrecreationalcannabisaccessonlabormarketsevidencefromcolorado AT chakrabortyavinandan effectsofrecreationalcannabisaccessonlabormarketsevidencefromcolorado AT doremusjacqueline effectsofrecreationalcannabisaccessonlabormarketsevidencefromcolorado AT stithsarah effectsofrecreationalcannabisaccessonlabormarketsevidencefromcolorado
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The effects of recreational cannabis access on labor markets: evidence from Colorado

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