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The Miracle Drug: Hormone Replacement Therapy and Labor Market Behavior of Middle-Aged Women

51 Pages Posted: 2 Feb 2012  

N. Meltem Daysal

Tilburg University; IZA

Chiara Orsini

London School of Economics & Political Science (LSE) - London School of Economics

Date Written: November 1, 2011

Abstract

In an aging society, determining which factors contribute to the employment of older individuals is increasingly important. This paper sheds light on the impact of medical innovation in the form of Hormone Replacement Therapy (HRT) on employment of middle-aged women. HRT are drugs taken by middle-aged women to soften symptoms related to menopause. Before 2002, HRT products were among the most popular prescription drugs in America. We use the timing of the release of information of the potential hazardous effects of HRT - uncovered in 2002 by the largest randomized trials on women ever undertaken - as an instrument for the purchase of the affected drugs within a Fixed Effect Instrumental Variable framework. We find that HRT use impacts employment: namely, that HRT use increases employment by 25 percentage points among middle-aged women who would have taken HRT but who do not take HRT after the release of information of its potential hazardous effects.

Keywords: employment of middle-aged women, drug safety

JEL Classification: H8, I1, J2

Suggested Citation

Daysal, N. Meltem and Orsini, Chiara, The Miracle Drug: Hormone Replacement Therapy and Labor Market Behavior of Middle-Aged Women (November 1, 2011). Netspar Discussion Paper No. 11/2011-112. Available at SSRN: https://ssrn.com/abstract=1996472 or http://dx.doi.org/10.2139/ssrn.1996472

N. Meltem Daysal (Contact Author)

Tilburg University ( email )

P.O. Box 90153
Tilburg, DC 5000 LE
Netherlands

HOME PAGE: http://www.meltemdaysal.com

IZA ( email )

P.O. Box 7240
Bonn, D-53072
Germany

HOME PAGE: http://www.meltemdaysal.com

Chiara Orsini

London School of Economics & Political Science (LSE) - London School of Economics ( email )

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