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Adult-Use [Cannabis] Legalization Laws Associated with Declines in Workers’ Compensation Claims

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The enactment of state-specific adult-use [cannabis] legalization laws is associated with a decline in the number of workers’ compensation claims filed, according to a new National Bureau of Economic Research paper.

Commenting on the findings, NORML’s Deputy Director Paul Armentano said: “These findings ought to assuage concerns that liberalizing cannabis’ criminal status might somehow negatively impact workplace productivity or safety. The empirical data to date does not substantiate such fears.”

A team of researchers from the RAND Corporation, the University of Cincinnati, Temple University, and Wayne University assessed the relationship between adult-use [cannabis] access and workers’ compensation claims among adults ages 40 to 62. They reported that legalization was independently associated with both a decline in the number of older employees filing workers’ compensation claims, as well as a reduction in the total amount of financial benefits paid out in successful claims. Authors emphasized: “These results are not driven by pre-existing trends… The observed reduction in WC [workers’ compensation] benefits [was] not due to a concurrent decrease in labor supply mechanically reducing WC participation or due to industry composition shifts which lead to a higher share of the workforce in safer industries. Instead, we observe an increase in labor supply due to RML [recreational [cannabis] laws] adoption, which is further in line with RMLs improving work capacity among older adults.”

Overall, older workers in states where cannabis access was legalized for adults reported a 20 percent decline in workers’ compensation filings as compared to control states (where cannabis had not been legalized). In addition, annual income received from successful workers’ compensation claims declined 20.5 percent in states post-legalization.

Authors concluded: “The present study provides empirical evidence on the consequences of [cannabis] legalization on issues related to the labor market outcomes, in particular, WC claiming of older adults. … Our findings suggest potentially important benefits to older workers and society at large. Broadly, we show non-trivial improvements in work capacity, which we proxy with WC benefit receipt and various other metrics in our mechanism analysis, among older adults.”

Previous research had identified a similar, but not as significant, decline in workers’ compensation filings following the enactment of medical [cannabis] laws. That study, published in 2020, concluded, “On net, the available findings suggest that MML passage may increase work capacity among older adults, reduce work absences, improve workplace safety, and reduce WC claiming and the pain and suffering associated with workplace injuries.”

Full text of the study, “Does [cannabis] legalization affect workplace capacity? Evidence from workers’ compensation benefits,” is available from National Bureau of Economic Research. Additional information is available from the NORML fact-sheet, “[Cannabis] Legalization and Impact on the Workplace.”

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NORML advocates for changes in public policy so that the responsible possession and use of [cannabis] by adults is no longer subject to criminal penalties. NORML further advocates for a regulated commercial cannabis market so that activities involving the for-profit production and retail sale of cannabis and cannabis products are safe, transparent, consumer-friendly, and are subject to state and/or local licensure. Finally, NORML advocates for additional changes in legal and regulatory policies so that those who use [cannabis] responsibly no longer face either social stigma or workplace discrimination, and so that those with past criminal records for [cannabis]-related violations have the opportunity to have their records automatically expunged.

Find out more at norml.org and read our Fact Sheets on the most common misconceptions and myths regarding reform efforts around the country.

For Immediate Release

Contact:
media@norml.org

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