Do Medical Treatments Work for Work? Evidence from Breast Cancer Patients

We investigate the effects of radiation therapy on the mortality and economic outcomes of breast cancer patients.

We investigate the effects of radiation therapy on the mortality and economic outcomes of breast cancer patients. We implement a 2SLS strategy within a difference-in-difference framework exploiting variation in treatment stemming from a medical guideline change in Denmark. We reproduce the results from an RCT showing the lifesaving benefits of radiotherapy. We show radiation therapy also has economic returns: Ten years after diagnosis, treatment increases employment by 37 percent and earnings by 45 percent. Previous work has documented a substantial employment drop after a breast cancer diagnosis. Our results imply that radiation therapy can reduce this effect by 70 percent. (JEL H51, I12, I18, J16, J22, J31)