Federal Reserve Chair Janet Yellen said she is not sure if it is a cause of the decline or a symptom revealing more longstanding economic problems.
Technological changes and an aging workforce also contribute, she said.
The Centers for Disease Control estimates that prescription drug abuse costs $78.5bn (Â£61.5bn) annually.
This is due to costs related to health care, lost productivity, and criminal activity.
About 91 Americans die every day after overdosing on opioids.
"I do think it is related to a decline in labour force participation among prime-age workers," Ms Yellen said after a question from Senator Joe Donnelly, a Democrat from Indiana.
"I don't know if it's causal or if it's a symptom of long-running economic maladies."
Ms Yellen also noted that the US has seen an unusual rise in its death rate.
"It's obviously a very serious and heartbreaking problem," she said.
It was Ms Yellen's second day of testimony before lawmakers, who asked questions about monetary policy, prospects for economic outlook and other issues.
Economists have puzzled over the fall in labour force participation rates, the share of people working or looking for work.
For the over-16 civilian population, they have declined from a peak of about 67% in the late 1990s to less than 63% today, according to the US Bureau of Labor Statistics.
Among men, the rates have fallen from about 80% in the late 1960s to less than 70% today. They have risen among women from about 42% to nearly 57% during that time.
Ms Yellen on Wednesday said she believed an aging population was a major factor in the overall decline.
She also said men with less education have been particularly affected by technological changes that reduce jobs in some industries.
Some economists also argue that video games are to blame.
Ms Yellen's remarks came on the same day that top US prosecutor Jeff Sessions announced charges against more than 120 people, including doctors, related to prescription drugs.
The charges were part of a more sweeping crackdown on Medicaid fraud.

It says the new rule would apply in cases of "repeated instances of the most serious and deliberate breaches of their licence conditions".
The party claims their pledged action would protect consumer interests.
But the current regulator, Ofgem, said it already had the power to remove licences from energy firms in certain circumstances.
"Where firms fail to meet standards there must be tough and decisive action," said Caroline Flint, the shadow energy secretary.
Labour has already promised to abolish Ofgem, and put a new regulator in place.
An Ofgem spokesman said it already had powers to revoke licences in "specific circumstances, including where companies have failed to comply with particular enforcement orders."
However, a Labour spokesman said the current rules meant a firm could repeatedly break the law as long as it paid the fines issued by Ofgem.
"That's the kind of regulatory gap we want to address," he said.
Energy UK, the trade body for the industry, said it already had strong penalties for companies found to be in breach of licence conditions.
"Having a strong set of licence conditions is essential for the protection of consumer rights," it said.
Labour also revealed figures, obtained under the Freedom of Information Act, which it said showed 16 energy companies faced probes into mis-selling, poor customer service and other bad practices.
Ms Flint said the figures showed that the current government had "presided over a broken energy market".
"On David Cameron's watch, energy bills in Britain have risen twice as fast as inflation, four times faster than wages and faster than almost any other country in the developed world," she added.
In response, a Conservative spokesman said the government was already taking action to address the issues raised, including forcing energy firms to simplify bills.
"We're carrying out a full, independent inquiry to fix the broken market we inherited," he added.
Widespread opioid abuse is tied to a fall in the share of Americans working or looking for work, the head of the US central bank said on Thursday.
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Labour says it will give a new regulator power to remove energy firms' licences, if it wins the next election.