Advanced Search
MyIDEAS: Login to save this article or follow this journal

The effects of pay and job satisfaction on the labour supply of hospital consultants

Contents:

Author Info

  • Divine Ikenwilo

    (Health Economics Research Unit (HERU), University of Aberdeen, UK)

  • Anthony Scott

    (Melbourne Institute of Applied Economic and Social Research, University of Melbourne, Australia)

Abstract

There is little evidence about the responsiveness of doctors' labour supply to changes in pay. Given substantial increases in NHS expenditure, new national contracts for hospital doctors and general practitioners that involve increases in pay, and the gradual imposition of a ceiling on hours worked through the European Working Time Directive, knowledge of the size of labour supply elasticities is crucial in examining the effects of these major changes. This paper estimates a modified labour supply model for hospital consultants, using data from a survey of consultants in Scotland. Rigidities in wage setting within the NHS mean that the usual specification of the labour supply model is extended by the inclusion of job quality (job satisfaction) in the equation explaining the optimal number of hours worked. Generalised Method of Moments estimation is used to account for the endogeneity of both earnings and job quality. Our results confirm the importance of pay and non-pay factors on the supply of labour by consultants. The results are sensitive to the exclusion of job quality and show a slight underestimation of the uncompensated earnings elasticity (of 0.09) without controlling for the effect of job quality, and 0.12 when we controlled for job quality. Pay increases in the new contract for consultants will only result in small increases in hours worked. Small and non-significant elasticity estimates at higher quantiles in the distribution of hours suggest that any increases in hours worked are more likely for consultants who work part time. Those currently working above the median number of hours are much less responsive to changes in earnings. Copyright © 2007 John Wiley & Sons, Ltd.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://hdl.handle.net/10.1002/hec.1220
File Function: Link to full text; subscription required
Download Restriction: no

Bibliographic Info

Article provided by John Wiley & Sons, Ltd. in its journal Health Economics.

Volume (Year): 16 (2007)
Issue (Month): 12 ()
Pages: 1303-1318

as in new window
Handle: RePEc:wly:hlthec:v:16:y:2007:i:12:p:1303-1318

Contact details of provider:
Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/5749

Related research

Keywords:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Daniel S. Hamermesh, 1999. "The Changing Distribution of Job Satisfaction," NBER Working Papers 7332, National Bureau of Economic Research, Inc.
  2. Bernard M.S. van Praag & P. Frijters & A. Ferrer-i-Carbonell, 2002. "The Anatomy of Subjective Well-being," Tinbergen Institute Discussion Papers 02-022/3, Tinbergen Institute.
  3. Amemiya, Takeshi, 1982. "Two Stage Least Absolute Deviations Estimators," Econometrica, Econometric Society, vol. 50(3), pages 689-711, May.
  4. Bernard M. S. van Praag & P. Frijters & Ada Ferrer-i-Carbonell, 2001. "The Anatomy of Subjective Well-Being," Discussion Papers of DIW Berlin 265, DIW Berlin, German Institute for Economic Research.
  5. Jinyong Hahn & Jerry Hausman, 1999. "A New Specification Test for the Validity of Instrumental Variables," Working papers 99-11, Massachusetts Institute of Technology (MIT), Department of Economics.
  6. McClements, L. D., 1977. "Equivalence scales for children," Journal of Public Economics, Elsevier, vol. 8(2), pages 191-210, October.
  7. Nigel Rice, 2005. "The labour supply of nurses in the UK: evidence from the British Household Panel Survey," Health, Econometrics and Data Group (HEDG) Working Papers 05/10, HEDG, c/o Department of Economics, University of York.
  8. Noether, Monica, 1986. "The Growing Supply of Physicians: Has the Market Become More Competitive?," Journal of Labor Economics, University of Chicago Press, vol. 4(4), pages 503-37, October.
  9. Bernard M.S. van Praag & Ada Ferrer-i-Carbonell, 2002. "Life Satisfaction Differences between Workers and Non-Workers - The Value of Participation per se," Tinbergen Institute Discussion Papers 02-018/3, Tinbergen Institute.
  10. Christophe Muller & Tae-Hwan Kim, 2004. "Two-Stage Quantile Regression When The First Stage Is Based On Quantile Regression," Working Papers. Serie AD 2004-03, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  11. Badi H. Baltagi & Espen Bratberg & Tor Helge Holmås, 2003. "A Panel Data Study of Physicians’ Labor Supply: The Case of Norway," CESifo Working Paper Series 895, CESifo Group Munich.
  12. Douglas Staiger & James H. Stock, 1997. "Instrumental Variables Regression with Weak Instruments," Econometrica, Econometric Society, vol. 65(3), pages 557-586, May.
  13. Orazem, Peter & Mattila, J. Peter, 1998. "Male-Female Supply to State Government Jobs and Comparable Worth," Staff General Research Papers 10492, Iowa State University, Department of Economics.
  14. Christopher F Baum & Mark E. Schaffer & Steven Stillman, 2002. "Instrumental variables and GMM: Estimation and testing," Boston College Working Papers in Economics 545, Boston College Department of Economics, revised 14 Feb 2003.
  15. Paul Frijters & Michael Shields & Stephen Wheatley Price, 2004. "Investigating the Quitting Decision of Nurses: Panel Data Evidence from the British National Health Service," CEPR Discussion Papers 471, Centre for Economic Policy Research, Research School of Economics, Australian National University.
  16. Diane Sk�tun & Emanuela Antonazzo & Anthony Scott & Robert Elliott, 2005. "The supply of qualified nurses: a classical model of labour supply," Applied Economics, Taylor & Francis Journals, vol. 37(1), pages 57-65.
  17. Emanuela Antonazzo & Anthony Scott & Diane Skatun & Robert. F. Elliott, 2003. "The labour market for nursing: a review of the labour supply literature," Health Economics, John Wiley & Sons, Ltd., vol. 12(6), pages 465-478.
  18. Shields, Michael & Ward-Warmedinger, Melanie, 2001. "Improving Nurse Retention in the National Health Service in England: The Impact of Job Satisfaction on Intentions to Quit," CEPR Discussion Papers 2806, C.E.P.R. Discussion Papers.
  19. Anthony Scott & Hugh Gravelle & Steven Simoens & Chris Bojke & Bonnie Sibbald, 2006. "Job Satisfaction and Quitting Intentions: A Structural Model of British General Practitioners," British Journal of Industrial Relations, London School of Economics, vol. 44(3), pages 519-540, 09.
  20. Partha Deb & Sandra G Sosa-Rubi, 2005. "The labour supply of nurses in the UK: evidence from the British Household Panel Survey," Health, Econometrics and Data Group (HEDG) Working Papers 05/11, HEDG, c/o Department of Economics, University of York.
  21. Scott, Anthony, 2001. "Eliciting GPs' preferences for pecuniary and non-pecuniary job characteristics," Journal of Health Economics, Elsevier, vol. 20(3), pages 329-347, May.
  22. Showalter, Mark H. & Thurston, Norman K., 1997. "Taxes and labor supply of high-income physicians," Journal of Public Economics, Elsevier, vol. 66(1), pages 73-97, October.
  23. Ada Ferrer-i-Carbonell & Paul Frijters, 2002. "How important is Methodology for the Estimates of the Determinants of Happiness?," Tinbergen Institute Discussion Papers 02-024/3, Tinbergen Institute.
  24. Arne L. Kalleberg & Stephen Vaisey, 2005. "Pathways to a Good Job: Perceived Work Quality among the Machinists in North America," British Journal of Industrial Relations, London School of Economics, vol. 43(3), pages 431-454, 09.
  25. Koenker, Roger W & Bassett, Gilbert, Jr, 1978. "Regression Quantiles," Econometrica, Econometric Society, vol. 46(1), pages 33-50, January.
  26. Jan Erik Askildsen & Badi H. Baltagi & Tor Helge Holmås, 2003. "Wage policy in the health care sector: a panel data analysis of nurses' labour supply," Health Economics, John Wiley & Sons, Ltd., vol. 12(9), pages 705-719.
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 in new window

Cited by:
  1. Andreassen Leif & Di Tommaso Maria Laura & Strom Steinar, 2012. "Do medical doctors respond to economic incentives?," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201206, University of Turin.
  2. Johar, Meliyanni, 2010. "The effect of a public health card program on the supply of health care," Social Science & Medicine, Elsevier, vol. 70(10), pages 1527-1535, May.
  3. Terence Chai Cheng & Anthony Scott & Sung-Hee Jeon & Guyonne Kalb & John Humphreys & Catherine Joyce, 2010. "What Factors Influence the Earnings of GPs and Medical Specialists in Australia? Evidence from the MABEL Survey," Melbourne Institute Working Paper Series wp2010n12, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
  4. Brekke, Kurt R. & Siciliani, Luigi & Straume, Odd Rune, 2014. "Hospital Mergers with Regulated Prices," Discussion Paper Series in Economics 21/2014, Department of Economics, Norwegian School of Economics.
  5. Brekke, Kurt R. & Siciliani, Luigi & Straume, Odd Rune, 2012. "Quality competition with profit constraints," Journal of Economic Behavior & Organization, Elsevier, vol. 84(2), pages 642-659.
  6. Hanel, Barbara & Kalb, Guyonne & Scott, Anthony, 2012. "Nurses' Labour Supply Elasticities: The Importance of Accounting for Extensive Margins," IZA Discussion Papers 6573, Institute for the Study of Labor (IZA).
  7. Olivier Chanel & Alain Paraponaris & Christèle Protière & Bruno Ventelou, 2010. "Get paid more, work more? Lessons from French physicians' labour supply responses to hypothetic fee increases," Working Papers halshs-00543971, HAL.
  8. Terence C. Cheng & Pravin K. Trivedi, 2014. "Attrition Bias in Panel Data: A Sheep in Wolf’s Clothing? A Case Study Based on the MABEL Survey," Melbourne Institute Working Paper Series wp2014n14, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:wly:hlthec:v:16:y:2007:i:12:p:1303-1318. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.

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