This is the conclusion of Desal et al. (2025).
We reproduce the results of an RCT showing the life-saving benefits of radiotherapy. We show that radiation therapy also has economic benefits: ten years after diagnosis, treatment increases employment by 37 percent and earnings by 45 percent. Previous work has documented significant declines in employment following a breast cancer diagnosis. Our results show that radiation therapy can reduce this effect by up to 70 percent.
In addition to these empirical results, the paper also addresses two key methodological issues in real-world health economic analysis. This first issue is that treatment has an endogenous function in the real world. Patients in poor health receive more intensive medical treatment; Thus, patients receiving advanced treatments may appear to have worse outcomes – not because the intervention does not work – but because patients are sicker. Second, measuring changes in social welfare holistically is problematic because it requires data not only on health but also on economic outcomes.
Authors in prior issues use changes in clinical guidelines as a tool for treatment assignment. Specifically, they apply the 2SLS strategy within a difference-in-differences framework. For the latter issue, the authors use integrated administrative data from Denmark (1990–2008). Mortality data comes from Register of causes of death; labor market results Register-Based Labor Force Statistics; Income figures come in income statistics register; And finally come government transfers Dream dataset, a weekly register of all individuals receiving government transfers.
You can read the full paper here.
