The increase in labor force participation, and consequently, the increase in employment of women is one of the most striking trends in the twentieth century. Although this trend is likely due to the complex interaction of many factors, available research in economics recognizes, among other causes, the important role of medical innovation in shaping labor market behavior of both men and women.
In an aging society, determining which factors contribute to the employment of older individuals is increasingly important.
Despite the evidence on the impact of medical innovations on women’s labor market behavior during reproductive years, there is very little research on the labor market effects of medical innovations aimed at women at the end of their reproductive years, commonly known as “menopause transition”.
N. Meltem Daysal and Chiara Orsini examine the impact of medical innovations on the employment of middle-aged women focusing on the specific case of Hormone Replacement Therapy (HRT), a common treatment for the alleviation of negative menopausal symptoms in The Miracle Drugs: Hormone Replacement Therapy and Labor Market Behavior of Middle-Aged Women .
HRT medications were among the most popular prescriptions in the United States until 2002 when the Women’s Health Initiative Study – the largest randomized control trial on women ever undertaken – documented the health risks associated with their long term use.
The authors exploit the release of these findings within a Fixed Effect Instrumental Variable framework to address the endogeneity in HRT use.
Their results indicate substantial benefits of HRT use to the short-term employment of middle-aged women. Indeed, HRT use increases employment of middle-aged women by 1.9 percentage points or 2.44 percent.
Chosen excerpts by Job Market Monitor. Read the whole story at The Miracle Drugs: Hormone Replacement Therapy and Labor Market Behavior of Middle-Aged Women