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

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

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References

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Cited by:
  1. Cohen-Goldner, Sarit & Paserman, M. Daniele, 2011. "The dynamic impact of immigration on natives' labor market outcomes: Evidence from Israel," European Economic Review, Elsevier, vol. 55(8), pages 1027-1045.
  2. Angrist, Joshua D. & Guryan, Jonathan, 2008. "Does teacher testing raise teacher quality? Evidence from state certification requirements," Economics of Education Review, Elsevier, vol. 27(5), pages 483-503, October.

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