N. Meltem Daysal and co-author's new working paper featured on the NBER website.
N. Meltem Daysal, and her co-authors William N. Evans, Mikkel Hasse Pedersen & Mircea Trandafir’s new working paper featured on the NBER website.
They investigate the effects of radiation therapy on the mortality and economic outcomes of breast cancer patients. They implement a 2SLS strategy within a difference-in-difference framework exploiting variation in treatment stemming from a medical guideline change in Denmark. Using administrative data, we reproduce results from an RCT showing the lifesaving benefits of radiotherapy. They then show therapy also has economic returns: ten years after diagnosis, treatment increases employment by 37% and earnings by 45%. Mortality and economic results are driven by results for more educated women, indicating that equalizing access to treatment may not be sufficient to reduce health inequalities.
Understanding the effects of medical treatments on economic outcomes may have fundamental implications for health policy. However, rigorous evidence addressing this question is scarce, for at least two reasons. The first is the endogenous assignment of medical treatments. Patients in worse health tend to receive more intensive medical treatments. At the same time, most determinants of health likely affect economic outcomes, making empirical identification challenging. Second, addressing this question requires detailed linked data on individual health, medical treatments, and economic outcomes. The ability to observe these outcomes for an extended period of time is essential to capture any long-run adjustments. In this paper, we overcome these challenges by investigating the effects of radiation therapy on the mortality and labor market outcomes of breast cancer patients in Denmark.
You can read more in the NBER working paper here