This is work with Tim Moore (Purdue University). A draft is in progress and not ready for circulation. Please e-mail for recent version.
Abstract:: Starting in late 2000, Australia experienced a large negative heroin supply shock that persisted for several years. We use drug treatment records to identify more than 27,000 individuals using opioids prior to the shock, and examine how it affected their health and criminal activity. We find that opioid users initially substituted to other illicit drugs and committed more offenses, especially for violent crimes. Most of these effects dissipate after one year, and are followed by a large decrease in property crime. A sustained reduction in opioid-related mortality is only slightly offset by increases in other causes of death. Our results show that reducing the supply of illicit opioids can lead to meaningful long-term improvements in key health and crime outcomes, even if the effects are ambiguous in the short term.