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Doctors without Borders: The Returns to an Occupational License for Soviet Immigrant Physicians in Israel

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Author Info
Kugler, Adriana D.
Sauer, Robert M
Abstract

Re-licensing requirements for professionals that move across borders are widespread. In this Paper, we measure the returns to an occupational license using novel data on Soviet trained physicians that immigrated to Israel. An immigrant re-training assignment rule used by the Israel Ministry of Health pro- ides an exogenous source of variation in re-licensing outcomes. Instrumental variables and quantile treatment effects estimates of the returns to an occupa- ional license indicate excess wages due to occupational entry restrictions and negative selection into licensing status. We develop a model of optimal license acquisition that suggests that the wages of high-skilled immigrant physicians in the non-physician sector outweigh the lower direct costs that these immigrants face in acquiring a medical license. Licensing thus leads to lower average quality of service. The positive earnings effect of entry restrictions far outweighs the lower practitioner quality earnings effect that licensing induces.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 3683.

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Date of creation: Jan 2003
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Handle: RePEc:cpr:ceprdp:3683

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Related research
Keywords: immigration information and product quality licensing occupational mobility quantile regression quantile treatment effects model regression discontinuity design regulation

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Find related papers by JEL classification:
D45 - Microeconomics - - Market Structure and Pricing - - - Rationing; Licensing
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
J61 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Geographic Labor Mobility; Immigrant Workers
J62 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Job, Occupational and Intergenerational Mobility; Promotion
L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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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.:
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    Other versions:
  20. Borjas, George J., 1999. "The economic analysis of immigration," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 28, pages 1697-1760 Elsevier. [Downloadable!] (restricted)
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  22. Shaked, Avner & Sutton, John, 1981. "The Self-Regulating Profession," Review of Economic Studies, Blackwell Publishing, vol. 48(2), pages 217-34, April. [Downloadable!] (restricted)
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  1. Cohen-Goldner, Sarit & Paserman, M. Daniele, 2004. "The Dynamic Impact of Immigration on Natives' Labor Market Outcomes: Evidence from Israel," IZA Discussion Papers 1315, Institute for the Study of Labor (IZA). [Downloadable!]
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