IDEAS home Printed from https://ideas.repec.org/a/aea/aejapp/v8y2016i2p225-54.html
   My bibliography  Save this article

The Returns to Medical School: Evidence from Admission Lotteries

Author

Listed:
  • Nadine Ketel
  • Edwin Leuven
  • Hessel Oosterbeek
  • Bas van der Klaauw

Abstract

We exploit admission lotteries to estimate the returns to medical school in the Netherlands. Using data from up to 22 years after the lottery, we find that in every single year after graduation doctors earn at least 20 percent more than people who end up in their next-best occupation. Twenty-two years after the lottery the earnings difference is almost 50 percent. Only a small fraction of this difference can be attributed to differences in working hours and human capital investments. The returns do not vary with gender or ability, and shift the entire earnings distribution. (JEL D44, I11, I26, J24, J31, J44)

Suggested Citation

  • Nadine Ketel & Edwin Leuven & Hessel Oosterbeek & Bas van der Klaauw, 2016. "The Returns to Medical School: Evidence from Admission Lotteries," American Economic Journal: Applied Economics, American Economic Association, vol. 8(2), pages 225-254, April.
    • Handle: RePEc:aea:aejapp:v:8:y:2016:i:2:p:225-54
    Note: DOI: 10.1257/app.20140506
    as

    Download full text from publisher

    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/app.20140506
    Download Restriction: no
    File URL: https://www.aeaweb.org/aej/app/data/0802/2014-0506_data.zip
    Download Restriction: no
    File URL: https://www.aeaweb.org/aej/app/ds/0802/2014-0506_ds.zip
    Download Restriction: Access to full text is restricted to AEA members and institutional subscribers.
    ---><---

    References listed on IDEAS

    as
    1. Justine S. Hastings & Christopher A. Neilson & Seth D. Zimmerman, 2013. "Are Some Degrees Worth More than Others? Evidence from college admission cutoffs in Chile," NBER Working Papers 19241, National Bureau of Economic Research, Inc.
    2. Morris M. Kleiner & Alan B. Krueger, 2013. "Analyzing the Extent and Influence of Occupational Licensing on the Labor Market," Journal of Labor Economics, University of Chicago Press, vol. 31(S1), pages 173-202.
    3. Anderson, Gary M. & Halcoussis, Dennis & Johnston, Linda & Lowenberg, Anton D., 2000. "Regulatory barriers to entry in the healthcare industry: the case of alternative medicine," The Quarterly Review of Economics and Finance, Elsevier, vol. 40(4), pages 485-502.
    4. Adriana D. Kugler & Robert M. Sauer, 2005. "Doctors without Borders? Relicensing Requirements and Negative Selection in the Market for Physicians," Journal of Labor Economics, University of Chicago Press, vol. 23(3), pages 437-466, July.
    5. Guido W. Imbens & Donald B. Rubin, 1997. "Estimating Outcome Distributions for Compliers in Instrumental Variables Models," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 64(4), pages 555-574.
    6. Joseph G. Altonji & Erica Blom & Costas Meghir, 2012. "Heterogeneity in Human Capital Investments: High School Curriculum, College Major, and Careers," Annual Review of Economics, Annual Reviews, vol. 4(1), pages 185-223, July.
    7. Rie Fujisawa & Gaétan Lafortune, 2008. "The Remuneration of General Practitioners and Specialists in 14 OECD Countries: What are the Factors Influencing Variations across Countries?," OECD Health Working Papers 41, OECD Publishing.
    8. repec:mpr:mprres:5058 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Di Paolo, Antonio & Tansel, Aysit, 2017. "Analyzing Wage Differentials by Fields of Study: Evidence from Turkey," MPRA Paper 80299, University Library of Munich, Germany.
    2. Arcidiacono, Peter & Kinsler, Josh & Ransom, Tyler, 2022. "Asian American Discrimination in Harvard Admissions," European Economic Review, Elsevier, vol. 144(C).
    3. Artmann, Elisabeth & Ketel, Nadine & Oosterbeck, Hessel & van der Klaauw, Bas, 2018. "Field of study and family outcomes," Working Papers in Economics 736, University of Gothenburg, Department of Economics.
    4. Mark Anderson, D. & Diris, Ron & Montizaan, Raymond & Rees, Daniel I., 2023. "The effects of becoming a physician on prescription drug use and mental health treatment," Journal of Health Economics, Elsevier, vol. 91(C).
    5. Di Paolo, Antonio & Tansel, Aysit, 2017. "Analyzing Wage Differentials by Fields of Study: Evidence from Turkey," GLO Discussion Paper Series 91, Global Labor Organization (GLO).
    6. Yiqun Chen & Petra Persson & Maria Polyakova, 2019. "The Roots of Health Inequality and The Value of Intra-Family Expertise," NBER Working Papers 25618, National Bureau of Economic Research, Inc.
    7. Rostam-Afschar Davud, 2020. "Inklusive Beschäftigungspolitik: Fakten, Herausforderungen und neue Ideen zur Regulierung von Berufen," Zeitschrift für Wirtschaftspolitik, De Gruyter, vol. 69(2), pages 129-139, August.
    8. Joseph G. Altonji & Ling Zhong, 2021. "The Labor Market Returns to Advanced Degrees," Journal of Labor Economics, University of Chicago Press, vol. 39(2), pages 303-360.
    9. Kellner, Christian & Reinstein, David & Riener, Gerhard, 2019. "Ex-ante commitments to “give if you win” exceed donations after a win," Journal of Public Economics, Elsevier, vol. 169(C), pages 109-127.
    10. Jose P. Arrieta & Yash R. Shrestha, 2022. "On the strategic value of equifinal choice," Journal of Organization Design, Springer;Organizational Design Community, vol. 11(2), pages 37-45, June.
    11. Josep Amer-Mestre and Agnès Charpin, 2022. "Gender Differences in Early Occupational Choices: Evidence from Medical Specialty Selection," Economics Working Papers EUI ECO 2022/01, European University Institute.
    12. Elisabeth Artmann & Hessel Oosterbeek & Bas van der Klaauw, 2022. "Do Doctors Improve the Health Care of Their Parents? Evidence from Admission Lotteries," American Economic Journal: Applied Economics, American Economic Association, vol. 14(3), pages 164-184, July.
    13. Ketel, Nadine & Leuven, Edwin & Oosterbeek, Hessel & van der Klaauw, Bas, 2019. "Do Dutch dentists extract monopoly rents?," Journal of Health Economics, Elsevier, vol. 63(C), pages 145-158.
    14. Didier Nibbering & Matthijs Oosterveen, 2023. "Instrument-based estimation of full treatment effects with movers," Papers 2306.07018, arXiv.org.
    15. Artmann, Elisabeth & Ketel, Nadine & Oosterbeek, Hessel & van der Klaauw, Bas, 2021. "Field of study and partner choice," Economics of Education Review, Elsevier, vol. 84(C).
    16. Jena, Anupam B. & Slusky, David & Springer, Lilly, 2023. "Occupational Hazard? An Analysis of Birth Outcomes among Physician Mothers," IZA Discussion Papers 16655, Institute of Labor Economics (IZA).
    17. Arpita Patnaik & Matthew J. Wiswall & Basit Zafar, 2020. "College Majors," NBER Working Papers 27645, National Bureau of Economic Research, Inc.
    18. Heinesen, Eskil, 2018. "Admission to higher education programmes and student educational outcomes and earnings–Evidence from Denmark," Economics of Education Review, Elsevier, vol. 63(C), pages 1-19.
    19. Omar Bamieh & Andrea Cintolesi & Mario Pagliero, 2024. "Estimating the returns to occupational licensing: evidence from regression discontinuities at the bar exam," Temi di discussione (Economic working papers) 1440, Bank of Italy, Economic Research and International Relations Area.
    20. Boneva, Teodora & Golin, Marta & Rauh, Christopher, 2022. "Can perceived returns explain enrollment gaps in postgraduate education?," Labour Economics, Elsevier, vol. 77(C).
    21. Bas Scheer & Brinn Hekkelman & Mark Kattenberg, 2024. "The Costs of Affirmative Action: Evidence from a Medical School Lottery," CPB Discussion Paper 455, CPB Netherlands Bureau for Economic Policy Analysis.
    22. Morris M. Kleiner, 2017. "The influence of occupational licensing and regulation," IZA World of Labor, Institute of Labor Economics (IZA), pages 392-392, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lars Kirkebøen & Edwin Leuven & Magne Mogstad, 2014. "Field of Study, Earnings, and Self-Selection," NBER Working Papers 20816, National Bureau of Economic Research, Inc.
    2. Dustin Chambers & Colin O’Reilly, 2022. "The economic theory of regulation and inequality," Public Choice, Springer, vol. 193(1), pages 63-78, October.
    3. Artmann, Elisabeth & Ketel, Nadine & Oosterbeek, Hessel & van der Klaauw, Bas, 2018. "Field of Study and Family Outcomes," IZA Discussion Papers 11658, Institute of Labor Economics (IZA).
    4. Wei Chi & Morris M. Kleiner & Xiaoye Qian, 2017. "Do Occupational Regulations Increase Earnings? Evidence from China," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 56(2), pages 351-381, April.
    5. Artmann, Elisabeth & Ketel, Nadine & Oosterbeek, Hessel & van der Klaauw, Bas, 2021. "Field of study and partner choice," Economics of Education Review, Elsevier, vol. 84(C).
    6. Gordon B. Dahl & Dan-Olof Rooth & Anders Stenberg, 2024. "Intergenerational and Sibling Spillovers in High School Majors," American Economic Journal: Economic Policy, American Economic Association, vol. 16(3), pages 133-173, August.
    7. Ketel, Nadine & Leuven, Edwin & Oosterbeek, Hessel & van der Klaauw, Bas, 2019. "Do Dutch dentists extract monopoly rents?," Journal of Health Economics, Elsevier, vol. 63(C), pages 145-158.
    8. Sauro Mocetti & Giacomo Roma & Enrico Rubolino, 2022. "Knocking on Parents’ Doors: Regulation and Intergenerational Mobility," Journal of Human Resources, University of Wisconsin Press, vol. 57(2), pages 525-554.
    9. TANAKA Mari & NARITA Yusuke & MORIGUCHI Chiaki, 2020. "Meritocracy and Its Discontent: Long-run Effects of Repeated School Admission Reforms," Discussion papers 20002, Research Institute of Economy, Trade and Industry (RIETI).
    10. Di Paolo, Antonio & Tansel, Aysit, 2017. "Analyzing Wage Differentials by Fields of Study: Evidence from Turkey," GLO Discussion Paper Series 91, Global Labor Organization (GLO).
    11. Tarun Jain & Abhiroop Mukhopadhyay & Nishith Prakash & Raghav Rakesh, 2022. "Science education and labor market outcomes in a developing economy," Economic Inquiry, Western Economic Association International, vol. 60(2), pages 741-763, April.
    12. Bordon, Paola & Fu, Chao, 2015. "College-Major Choice to College-Then-Major Choice," MPRA Paper 79643, University Library of Munich, Germany.
    13. Sungjin Cho & Jihye Kam & Soohyung Lee, 2018. "Efficient Supply Of Human Capital: Role Of College Major," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 63(05), pages 1319-1343, December.
    14. Adam Altmejd & Andrés Barrios-Fernández & Marin Drlje & Joshua Goodman & Michael Hurwitz & Dejan Kovac & Christine Mulhern & Christopher Neilson & Jonathan Smith, 2021. "O Brother, Where Start Thou? Sibling Spillovers on College and Major Choice in Four Countries," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 136(3), pages 1831-1886.
    15. Christopher Neilson & Adam Altmejd & Andres Barrios-Fernandez & Marin Drlje & Dejan Kovac, 2019. "Siblings' Effects on College and Major Choices: Evidence from Chile, Croatia and Sweden," Working Papers 633, Princeton University, Department of Economics, Industrial Relations Section..
    16. Richard W. Patterson & Nolan G. Pope & Aaron Feudo, 2019. "Timing is Everything: Evidence from College Major Decisons," CESifo Working Paper Series 7448, CESifo.
    17. Aguirre, Josefa & Matta, Juan, 2021. "Walking in your footsteps: Sibling spillovers in higher education choices," Economics of Education Review, Elsevier, vol. 80(C).
    18. Mumford, Kevin J. & Patterson, Richard & Yim, Anthony, 2024. "College Course Shutouts," IZA Discussion Papers 16859, Institute of Labor Economics (IZA).
    19. Gordon Dahl & Dan-Olof Rooth & Anders Stenberg, 2020. "High School Majors, Comparative (Dis)Advantage, and Future Earnings," NBER Working Papers 27524, National Bureau of Economic Research, Inc.
    20. Sofoklis Goulas & Rigissa Megalokonomou, 2019. "Which degrees do students prefer during recessions?," Empirical Economics, Springer, vol. 56(6), pages 2093-2125, June.

    More about this item

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aea:aejapp:v:8:y:2016:i:2:p:225-54. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Michael P. Albert (email available below). General contact details of provider: https://edirc.repec.org/data/aeaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.