The Impact of Liability on the Physician Labor Market
AbstractThis study examines the impact of malpractice reforms on physician behavior using a new measure of liability risk and a nationally representative, individual-level data set on physician behavior. We match our liability measure to data on physician behavior from the Physician Practice Costs and Income Survey (PPCIS). Data from the PPCIS bracket a period of substantial state-level legal reform between 1983 and 1988, which provides identifying variation in our liability measure. We estimate the impact of liability reform on hours worked. We find an estimated elasticity of hours worked to liability exposure of - .285 for the full sample of physicians. The effect for physicians ages 55 or older is much larger: we find an elasticity of - 1.224 for this category. We find that an increase in $1 of expected liability is associated with a $.70-$1.05 increase in malpractice premiums. (c) 2009 by The University of Chicago. All rights reserved..
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Bibliographic InfoArticle provided by University of Chicago Press in its journal The Journal of Law and Economics.
Volume (Year): 52 (2009)
Issue (Month): 4 (November)
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Web page: http://www.journals.uchicago.edu/JLE/
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- Anca Cotet, 2009. "Tort Reform and the Demand for Medical Care: Evidence from State-by-State Variation in Non-Economic Damages Caps," Working Papers 200901, Ball State University, Department of Economics, revised Mar 2010.
- Lakdawalla, Darius N. & Seabury, Seth A., 2012. "The welfare effects of medical malpractice liability," International Review of Law and Economics, Elsevier, vol. 32(4), pages 356-369.
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- Eric Helland & Darius N. Lakdawalla & Anup Malani & Seth A. Seabury, 2014. "Unintended Consequences of Products Liability: Evidence from the Pharmaceutical Market," NBER Working Papers 20005, National Bureau of Economic Research, Inc.
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