Understanding the effect of substance abuse treatment on wages: An evaluation of the state of Connecticut's substance abuse treatment programs

Capitalizing on newly linked data between the Connecticut Department of Mental Health and Addiction Services (DHMAS) and the Connecticut Department of Labor (DOL), this study uses employment outcomes to evaluate the State of Connecticut's substance abuse treatment programs. Results of this study provide the evidence and inputs necessary to perform informed cost benefit analyses of Connecticut's substance abuse treatment system. Three primary research questions are answered: (1) What is the pattern of employment and earnings among treatment seekers before and after treatment? (2) What is the effect of substance abuse treatment on treatment seekers' employment outcomes, when controlling for additional variables? Specifically, does the amount of time a client spends in treatment or the act of completing treatment affect the client's employment outcomes? (3) How might the post-treatment earning trajectories of treatment seekers compare to similar individuals in Connecticut who do not seek treatment?;Data for the current study consist of individuals seeking treatment for substance abuse in outpatient, residential, and methadone maintenance settings in Connecticut during state fiscal year 2001. Two outcome measures are examined, first a dichotomous measure of quarterly employment status and second a continuous measure of quarterly wages for clients who were employed during the study period. Analysis includes both descriptive and multivariate statistical techniques. Multivariate techniques are used to estimate the impact of treatment (including length of stay and treatment completion) and other covariates on the probability of employment and on earnings (for those employed in the study period). Post-treatment wages are further evaluated using a quasi-experimental design. Post-treatment wages of the substance abuse clients are compared to individuals in Connecticut with similar pre-treatment wages and similar demographic profiles. Historical data on treatment costs are compared to Connecticut's productivity gains in the form of increased income taxes collected.;Results suggest that completing treatment has an immediate and positive effect on labor market productivity for treatment seekers in terms of employment and earnings. These earnings gains are sustained over time, but not increasing at any measurable rate post-treatment. Findings from the quasi-experimental models also suggest that clients in all three treatment modalities experience increases in earnings when compared to individuals in Connecticut with similar demographic profiles.