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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
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    References listed on IDEAS

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    Cited by:

    1. Arcidiacono, Peter & Kinsler, Josh & Ransom, Tyler, 2022. "Asian American Discrimination in Harvard Admissions," European Economic Review, Elsevier, vol. 144(C).
    2. 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).
    3. 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).
    4. 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).
    5. 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.
    6. 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.
    7. 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.
    8. 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).
    9. 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.
    10. 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).
    11. 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.
    12. Anupam Jena & David Slusky & Lilly Springer, 2023. "Occupational Hazard? An Analysis of Birth Outcomes Among Physician Mothers," NBER Working Papers 31955, National Bureau of Economic Research, Inc.
    13. Arpita Patnaik & Matthew J. Wiswall & Basit Zafar, 2020. "College Majors," NBER Working Papers 27645, National Bureau of Economic Research, Inc.
    14. 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.
    15. Boneva, Teodora & Golin, Marta & Rauh, Christopher, 2022. "Can perceived returns explain enrollment gaps in postgraduate education?," Labour Economics, Elsevier, vol. 77(C).
    16. 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.
    17. 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.
    18. 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.
    19. Didier Nibbering & Matthijs Oosterveen, 2023. "Instrument-based estimation of full treatment effects with movers," Papers 2306.07018, arXiv.org.
    20. 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.
    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.

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    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

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