Recreational Marijuana Laws and Workplace Absence

ABSTRACT

A near majority of states have now passed recreational marijuana laws (RMLs), but their impact on labor market behavior remains unclear. This study provides new causal evidence on the relationship between RMLs and workplace absence. Using a generalized difference‐in‐differences framework to exploit the staggered rollout of RMLs, I first document that the onset of legal recreational sales is accompanied by a 50% increase in the prevalence of prior‐month adult marijuana use in treated states relative to control states. Next, I show that retail market access leads to a 14% increase in the incidence of prior‐week workplace absence. Supplemental analyses of health outcomes suggest that part of the effect may be driven by increases in self‐reported mental health problems following the opening of recreational dispensaries. These findings suggest that marijuana legalization may affect labor market outcomes along margins not typically captured by employment status alone.