Innovation and Health Disparities During an Epidemic: The Case of HIV / Barton Hamilton, Andrés Hincapié, Emma C. Kalish, Nicholas W. Papageorge.

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Hamilton, Barton

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Material type: Text

TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w28864.Publication details: Cambridge, Mass. National Bureau of Economic Research 2021.Description: 1 online resource: illustrations (black and white)Subject(s):

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Abstract: We examine whether medical innovation can reinforce existing health disparities by disproportionately benefiting socioeconomically advantaged patients. The reason is that less advantaged patients often do not use new medications. This may be due to high costs of new drugs, but could also reflect differences in how side effects of new treatments interact with labor supply. To investigate, we develop a dynamic lifecycle model in which the effect of medical treatment on labor supply varies across sociodemographic groups. We estimate the model using rich data on treatment choices and employment decisions of men infected with HIV. In the model, treatments can improve long-run health, but can also cause immediate side effects that interact with the utility cost of work. Estimates indicate that HIV-infected men often forego medication to avoid side effects, in part to remain employed. This effect is stronger for people with fewer years of education, leading to lower use of treatment and worse health outcomes. As a result, while a breakthrough HIV treatment - known as HAART - improved lifetime utility for all patients, it disproportionately benefitted those with higher levels of completed education, thereby reinforcing existing inequality. A counterfactual subsidy that increases non-labor income reduces employment for all education groups, but only increases adoption of HAART and improves health among lower-education individuals, who face a starker health-work tradeoff.

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Item type	Home library	Collection	Call number	Status	Date due	Barcode	Item holds
Working Paper	Biblioteca Digital	Colección NBER	nber w28864 (Browse shelf(Opens below))	Not For Loan

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May 2021.

We examine whether medical innovation can reinforce existing health disparities by disproportionately benefiting socioeconomically advantaged patients. The reason is that less advantaged patients often do not use new medications. This may be due to high costs of new drugs, but could also reflect differences in how side effects of new treatments interact with labor supply. To investigate, we develop a dynamic lifecycle model in which the effect of medical treatment on labor supply varies across sociodemographic groups. We estimate the model using rich data on treatment choices and employment decisions of men infected with HIV. In the model, treatments can improve long-run health, but can also cause immediate side effects that interact with the utility cost of work. Estimates indicate that HIV-infected men often forego medication to avoid side effects, in part to remain employed. This effect is stronger for people with fewer years of education, leading to lower use of treatment and worse health outcomes. As a result, while a breakthrough HIV treatment - known as HAART - improved lifetime utility for all patients, it disproportionately benefitted those with higher levels of completed education, thereby reinforcing existing inequality. A counterfactual subsidy that increases non-labor income reduces employment for all education groups, but only increases adoption of HAART and improves health among lower-education individuals, who face a starker health-work tradeoff.