Essays on Industrial Organization and Health Economics
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Milla Hägg will defend her doctoral dissertation “Essays on Industrial Organization and Health Economics” on July 10th, 2026.
This dissertation examines how policy interventions and other treatments shape outcomes in healthcare and pharmaceutical markets, with a particular emphasis on spillovers, behavioral responses and long-term effects that extend beyond the immediate targets of the policies. The dissertation consists of an introductory chapter and three independent essays on industrial organization and health economics. The first chapter provides an introduction and summaries of the essays to follow.
In the first essay, I study state dependence in Finland's birth control pill market. Contraceptives are provided for free at healthcare providers for women under a certain age limit, but after aging out of eligibility, they must pay for the pills entirely out-of-pocket at retail pharmacies. Using individual-level prescription and purchase data, I estimate a reduced form model as well as a structural demand model incorporating state dependence. The institutional setting allows for precise identification, separating true state dependence from unobserved heterogeneity. I find strong persistence in demand: individuals continue using the same product from the program, even when cheaper substitutes exist and switching without monetary cost is actively offered to the individuals.
In the second essay, co-authored with Markku Siikanen, we examine the effects of cross-market mergers on prices, expenditure, and measures of pharmaceutical availability in the regulated pharmaceutical markets of Finland and Sweden. Exploiting variation from large global mergers that involve firms active in these markets but which are plausibly exogenous to local market conditions, we implement a difference-in-differences design with staggered treatments. Across outcomes and countries, we find no evidence of economically meaningful short-run adverse effects. At the same time, we show that estimates can be sensitive to research design choices, especially the definition of treatment timing, because some outcomes may respond at merger announcement rather than at deal completion.
In the third essay, co-authored with Mika Kortelainen, we study both the short- and long-run effects of maternity ward closures on children using nationwide administrative data from Finland and a staggered difference-in-differences design exploiting variation in the timing of closures across areas. Healthcare systems worldwide have increasingly consolidated services by closing small and rural hospital units, often justified by economies of scale and efficiency improvements. However, these policies may also generate early-life health shocks with potentially long-lasting consequences. In the short term, we document a positive health shock resulting from improvements in perinatal health measured by APGAR scores. The effect is especially salient for those from closure areas. In the long run, we document positive effects on human capital and labor market outcomes: children exposed to closures are more likely to complete upper secondary education and less likely to have a NEET status. These results highlight the importance of considering long-run consequences on children when evaluating the effectiveness of healthcare consolidation policies.
