We see menthol for vaporizer dispensers, in cough drops, and the good ole jar of rub that mom used on our chests when we were sick.
But should we use it?
Menthol is a mild anesthetic that provides a cooling sensation when used as a cough drop. The menthol is basically a local anesthetic which can temporarily numbs the nerves in the throat that are irritated by the cold symptoms and provide some relief. (Interestingly, menthol is added to cigarettes in part to numb the throat so new smokers can tolerate the smoke irritation better. Hmmm...)
Menthol cough drops must be used as a lozenge and not chewed or swallowed because the menthol must slowly be exposed to the throat for the numbing effect. They are not recommended for young children due to risk of choking. Since science lacks strong evidence, but the risk to most school aged children is low and it is safer than most other cough medicines, I use the "if it seems to help, use it" rule for children not at risk of choking. Do not let any child go to sleep with one in his mouth. First, he might choke if he falls asleep with it in his mouth. Second, we all need to brush teeth before sleeping to avoid cavities!
Vaporized into the air
The rubs for the skin
Menthol studies show variable effectiveness. It has been shown to decrease cough from baseline (but the placebo worked just as well) and did not show improved lung function with spirometry tests (but people stated they could breathe better) in this interesting study. (So people felt better, but there really was no objective improvement.) Putting menthol rubs directly under the nose, as opposed to rubbing it on the chest, may actually increase mucus production according to a study published in Chest. In children under age 2, this could result in an increase in more plugging of their more narrow airways. There is a more recent study that does show children ages 2-11 years with cough sleep better with a menthol rub on the chest.
Note: There is a Vick's BabyRub that does not contain menthol. Its ingredients have not been proven to be effective and some of the ingredients have their own concerns, but that does not fall into this discussion.