The miracle drug: Hormone replacement therapy and labor market behavior of middle-aged women

  • Chiara Orsini Chiara Orsini
  • Meltem Daysal Meltem Daysal

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 HormoneReplacement 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 popularprescription 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 aninstrument 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.

Netspar, Network for Studies on Pensions, Aging and Retirement, is a thinktank and knowledge network. Netspar is dedicated to promoting a wider understanding of the economic and social implications of pensions, aging and retirement in the Netherlands and Europe.


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