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Do medical doctors respond to economic incentives?

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  • Andreassen, Leif
  • Di Tommaso, Maria Laura
  • Strøm, Steinar

Abstract

A longitudinal analysis of married physicians labor supply is carried out on Norwegian data from 1997 to 1999. The model utilized for estimation implies that physicians can choose among 10 different job packages which are a combination of part time/full time, hospital/primary care, private/public sector, and not working. Their current choice is influenced by past available options due to a habit persistence parameter in the utility function. In the estimation we take into account the budget constraint, including all features of the tax system. Our results imply that an overall wage increase or less progressive taxation moves married physicians toward full time job packages, in particular to full time jobs in the private sector. But the overall and aggregate labor supply elasticities in the population of employed doctors are rather low compared to previous estimates.

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  • Andreassen, Leif & Di Tommaso, Maria Laura & Strøm, Steinar, 2013. "Do medical doctors respond to economic incentives?," Journal of Health Economics, Elsevier, vol. 32(2), pages 392-409.
    • Handle: RePEc:eee:jhecon:v:32:y:2013:i:2:p:392-409
    DOI: 10.1016/j.jhealeco.2012.12.002
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    11. Midttun, Linda, 2007. "Private or public? An empirical analysis of the importance of work values for work sector choice among Norwegian medical specialists," Social Science & Medicine, Elsevier, vol. 64(6), pages 1265-1277, March.
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    Cited by:

    1. Bernard Fortin & Nicolas Jacquemet & Bruce Shearer, 2021. "Labour supply, service intensity, and contracts: Theory and evidence on physicians," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 36(6), pages 686-702, September.
    2. Barbara Broadway & Guyonne Kalb & Jinhu Li & Anthony Scott, 2017. "Do Financial Incentives Influence GPs' Decisions to Do After‐hours Work? A Discrete Choice Labour Supply Model," Health Economics, John Wiley & Sons, Ltd., vol. 26(12), pages 52-66, December.
    3. Leif Andreassen & Maria Laura Di Tommaso & Steinar Strøm, 2014. "Wages Anatomy. Labor Supply of Nurses and a Comparison with Physicians," CESifo Working Paper Series 5084, CESifo.
    4. Francisco Costa & Letícia Nunes & Fabio Miessi Sanches, 2024. "How to Attract Physicians to Underserved Areas? Policy Recommendations from a Structural Model," The Review of Economics and Statistics, MIT Press, vol. 106(1), pages 36-52, January.
    5. Driouchi, Ahmed, 2014. "Evidence and Prospects of Shortage and Mobility of Medical Doctors: A Literature Survey," MPRA Paper 59322, University Library of Munich, Germany.
    6. Terence C. Cheng & Guyonne Kalb & Anthony Scott, 2018. "Public, private or both? Analyzing factors influencing the labour supply of medical specialists," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 51(2), pages 660-692, May.
    7. Terence C. Cheng & Pravin K. Trivedi, 2015. "Attrition Bias in Panel Data: A Sheep in Wolf's Clothing? A Case Study Based on the Mabel Survey," Health Economics, John Wiley & Sons, Ltd., vol. 24(9), pages 1101-1117, September.
    8. Kalb, Guyonne & Kühnle, Daniel & Scott, Anthony & Cheng, Terence Chai & Jeon, Sung-Hee, 2015. "What Factors Affect Doctors' Hours Decisions: Comparing Structural Discrete Choice and Reduced-Form Approaches," IZA Discussion Papers 9054, Institute of Labor Economics (IZA).
    9. Serra-Sastre, Victoria, 2024. "Workplace violence and intention to quit in the English NHS," LSE Research Online Documents on Economics 121623, London School of Economics and Political Science, LSE Library.
    10. Nibene H. Somé & Bernard Fortin & Bruce Shearer, 2024. "Measuring physicians' response to incentives: Labour supply, multitasking and earnings," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 57(2), pages 622-661, May.
    11. Bernard Fortin & Nicolas Jacquemet & Bruce Shearer, 2019. "Labour Supply, Service Intensity and Contract Choice: Theory and Evidence on Physicians," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-02158484, HAL.
    12. Leif Andreassen & Maria Laura Tommaso & Steinar Strøm, 2017. "Nurses and physicians: a longitudinal analysis of mobility between jobs and labor supply," Empirical Economics, Springer, vol. 52(4), pages 1235-1269, June.
    13. Choné, P. & Coudin, É. & Pla, A., 2014. "Are physician fees responsive to competition?," Health, Econometrics and Data Group (HEDG) Working Papers 14/20, HEDG, c/o Department of Economics, University of York.
    14. Carol Propper & George Stoye & Max Warner, 2023. "The effects of pension reforms on physician labour supply: Evidence from the English NHS," IFS Working Papers W23/26, Institute for Fiscal Studies.
    15. Marilena Locatelli & Steinar Strøm, 2015. "Longitudinal Analysis of Generic Substitution," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 43(3), pages 363-374, September.
    16. Guyonne Kalb & Daniel Kuehnle & Anthony Scott & Terence Chai Cheng & Sung‐Hee Jeon, 2018. "What factors affect physicians' labour supply: Comparing structural discrete choice and reduced‐form approaches," Health Economics, John Wiley & Sons, Ltd., vol. 27(2), pages 101-119, February.
    17. Zhang, Xue & Sweetman, Arthur, 2018. "Blended capitation and incentives: Fee codes inside and outside the capitated basket," Journal of Health Economics, Elsevier, vol. 60(C), pages 16-29.

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    More about this item

    Keywords

    Physicians’ labor supply; Multi-sector; Panel data;
    All these keywords.

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • I10 - Health, Education, and Welfare - - Health - - - General
    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions

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