US physician board certification and labor market returns

Purpose - This paper aims to determine the characteristics of board certification among US physicians and to test whether accounting for the expected gains to certification alters the pattern of the determinants of board certification. Design/methodology/approach - Splitting the sample into sub‐samples by characteristics associated with certification/non‐certification identified in a probit, the incremental gain to certification from log‐earnings equations is identified. Realizing that these methods are susceptible to sample selection, correction is made for it using the Heckman approach. Using the sample selection corrected equations, the expected gain to certification among those who certify is then predicted and those who do not certify is then predicted and this difference is included as a proxy for the expected gain in the original probit to ascertain whether including the expected gain alters the determinants of certification. Findings - Accounting for the expected gain alters the pattern of the determinants of certification. Although some groups such as blacks appear less likely to certify, after accounting for their expected return to certification, they are not as less likely. This is explained in terms of the expected marginal return to certification, market structure and practice setting. Research limitations/implications - The data used in the analysis apply only to young physicians in the USA. Also, these results may be applicable only to the particular cohort used in this analysis. Practical implications - The findings help to explain the absence of minority board certified physicians within the USA. Originality/value - This paper is the first to simultaneously estimate the returns to physician board certification and the decision to obtain certification.