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A panel data study of physicians’ labor supply: The case of Norway

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Author Info

  • Baltagi, Badi H.

    ()
    (Department of Economics, Texas A&M University)

  • Bratberg, Espen

    ()
    (University of Bergen, Department of Economics)

  • Holmås, Tor Helge

    ()
    (Programme for Health Economics in Bergen, University of Bergen)

Abstract

Physicians are key personnel in a sector which is important due to its size as well as the quality of service it provides. We estimate the labor supply of physicians employed at hospitals in Norway, using personnel register data merged with other public records. A dynamic labor supply equation is estimated using a sample of 1303 physicians observed over the period 1993-97. The methods of estimation are GMM and system GMM. We reject the static model in favor of a dynamic model and obtain a long-run wage elasticity of about 0.55. This is considerably higher than previously estimated for physicians, in particular for those who are not self-employed.

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Bibliographic Info

Paper provided by University of Bergen, Department of Economics in its series Working Papers in Economics with number 01/03.

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Length: 22 pages
Date of creation: 13 Feb 2003
Date of revision:
Handle: RePEc:hhs:bergec:2003_001

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Postal: Institutt for økonomi, Universitetet i Bergen, Postboks 7802, 5020 Bergen, Norway
Phone: (+47)55589200
Fax: (+47)55589210
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Web page: http://www.uib.no/econ/en
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Keywords: Physicians; labor supply; dynamic panel data.;

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References

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  1. Blundell, Richard & Walker, Ian, 1986. "A Life-Cycle Consistent Empirical Model of Family Labour Supply Using Cross-Section Data," Review of Economic Studies, Wiley Blackwell, vol. 53(4), pages 539-58, August.
  2. Thomas G. McGuire & Mark V. Pauly, 1991. "Physician Response to Fee Changes with Multiple Payers," Papers 0015, Boston University - Industry Studies Programme.
  3. Headen, Alvin E, Jr, 1990. "Wage, Returns to Ownership, and Fee Responses to Physician Supply," The Review of Economics and Statistics, MIT Press, vol. 72(1), pages 30-37, February.
  4. Richard Blundell & Thomas MaCurdy, 1998. "Labour supply: a review of alternative approaches," IFS Working Papers W98/18, Institute for Fiscal Studies.
  5. M Arellano & O Bover, 1990. "Another Look at the Instrumental Variable Estimation of Error-Components Models," CEP Discussion Papers dp0007, Centre for Economic Performance, LSE.
  6. Askildsen, Jan Erik & Baltagi, Badi H. & Holmås, Tor Helge, 2002. "Will Increased Wages Reduce Shortage of Nurses? A Panel Data Analysis of Nurses’ Labour Supply," Working Papers in Economics 21/02, University of Bergen, Department of Economics.
  7. Arellano, Manuel & Bond, Stephen, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Wiley Blackwell, vol. 58(2), pages 277-97, April.
  8. Laisney, François & Pohlmeier, Winfried & Staat, Matthias, 1991. "Estimation of labour supply functions using panel data: a survey," ZEW Discussion Papers 91-05, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  9. Blundell, R. & Bond, S., 1995. "Initial Conditions and Moment Restrictions in Dynamic Panel Data Models," Economics Papers 104, Economics Group, Nuffield College, University of Oxford.
  10. Christopher Ferrall & Allan W. Gregory & William Tholl, 1998. "Endogenous Work Hours and Practice Patterns of Canadian Physicians," Canadian Journal of Economics, Canadian Economics Association, vol. 31(1), pages 1-27, February.
  11. MaCurdy, Thomas E, 1981. "An Empirical Model of Labor Supply in a Life-Cycle Setting," Journal of Political Economy, University of Chicago Press, vol. 89(6), pages 1059-85, December.
  12. 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.
  13. Frank A. Sloan, 1975. "Physician supply behavior in the short run," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 28(4), pages 549-569, July.
  14. Hay, Joel & Leahy, Michael J., 1982. "Physician-induced demand : An empirical analysis of the consumer information gap," Journal of Health Economics, Elsevier, vol. 1(3), pages 231-244, December.
  15. Frank Windmeijer, 2000. "A finite sample correction for the variance of linear two-step GMM estimators," IFS Working Papers W00/19, Institute for Fiscal Studies.
  16. Gaynor, Martin & Pauly, Mark V, 1990. "Compensation and Productive Efficiency of Partnerships: Evidence from Medical Group Practice," Journal of Political Economy, University of Chicago Press, vol. 98(3), pages 544-73, June.
  17. McGuire, Thomas G. & Pauly, Mark V., 1991. "Physician response to fee changes with multiple payers," Journal of Health Economics, Elsevier, vol. 10(4), pages 385-410.
  18. Rizzo, John A. & Blumenthal, David, 1994. "Physician labor supply: Do income effects matter?," Journal of Health Economics, Elsevier, vol. 13(4), pages 433-453.
  19. 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.
  20. Lee, Robert H., 1990. "Monitoring physicians : A bargaining model of medical group practice," Journal of Health Economics, Elsevier, vol. 9(4), pages 463-481, December.
  21. Heckman, James J, 1993. "What Has Been Learned about Labor Supply in the Past Twenty Years?," American Economic Review, American Economic Association, vol. 83(2), pages 116-21, May.
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Citations

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Cited by:
  1. Fortin, Bernard & Jacquemet, Nicolas & Shearer, Bruce, 2010. "Labour Supply, Work Effort and Contract Choice: Theory and Evidence on Physicians," CLSSRN working papers clsrn_admin-2010-30, Vancouver School of Economics, revised 21 Oct 2010.
  2. Johannessen, Karl-Arne & Hagen, Terje P., 2012. "Variations in labor supply between female and male hospital physicians: Results from a modern welfare state," Health Policy, Elsevier, vol. 107(1), pages 74-82.
  3. Andreassen, Leif & Di Tomasso, Maria Laura & Strøm, Steinar, 2012. "Do Medical Doctors Respond to Economic Incentives?," Memorandum 32/2012, Oslo University, Department of Economics.
  4. Bratberg, Espen & Monstad, Karin, 2012. "Worried Sick? Worker Responses To Organizational Turmoil," Working Papers in Economics 08/12, University of Bergen, Department of Economics.
  5. 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.
  6. Terence Chai Cheng & Guyonne Kalb & Anthony Scott, 2013. "Public, Private or Both? Analysing Factors Influencing the Labour Supply of Medical Specialists," Melbourne Institute Working Paper Series wp2013n40, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
  7. Sæther, Erik Magnus, 2009. "A Discrete Choice Analysis of Norwegian Physicians’ Labor Supply and Sector Choice," HERO On line Working Paper Series 2003:19, Oslo University, Health Economics Research Programme.
  8. Huang, Bwo-Nung & Hwang, M.J. & Yang, C.W., 2008. "Causal relationship between energy consumption and GDP growth revisited: A dynamic panel data approach," Ecological Economics, Elsevier, vol. 67(1), pages 41-54, August.
  9. Divine Ikenwilo & Anthony Scott, 2007. "The effects of pay and job satisfaction on the labour supply of hospital consultants," Health Economics, John Wiley & Sons, Ltd., vol. 16(12), pages 1303-1318.
  10. 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.
  11. Chunzhou Mu & Shiko Maruyama, 2013. "Salient Gender Difference in the Wage Elasticity of General Practitioners' Labour Supply," Discussion Papers 2013-16, School of Economics, The University of New South Wales.
  12. Godager, Geir, 2009. "Four Empirical Essays on the Market for General Practitioners' Services," HERO On line Working Paper Series 2009:7, Oslo University, Health Economics Research Programme.

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