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Do Medical Doctors Respond to Economic Incentives?

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  • Andreassen, Leif

    ()
    (Department of Economics “Cognetti de Martiis”,)

  • Di Tomasso, Maria Laura

    ()
    (Department of Economics “Cognetti de Martiis”,)

  • Strøm, Steinar

    ()
    (Department of Economics “Cognetti de Martiis”,)

Abstract

A longitudinal analysis of married physicians labor supply is carried out on Norwegian data from 1997 to 1999. The model utilized for estimation implies that physicians can choose among 10 different job packages which are a combination of part time/full time, hospital/primary care, private/public sector, and not working. Their current choice is influenced by past available options due to a taste or habit persistence parameter in the utility function. In the estimation we take into account the budget constraint, including all features of the tax system. Our results imply that an overall wage increase or less progressive taxation moves married physicians towards full time job packages, in particular to full time jobs in the private sector. But the overall and aggregate labor supply elasticities in the population of employed doctors are rather low compared to previous estimates.

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File URL: https://www.sv.uio.no/econ/english/research/unpublished-works/working-papers/pdf-files/2012/memo-32-2012.pdf
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Bibliographic Info

Paper provided by Oslo University, Department of Economics in its series Memorandum with number 32/2012.

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Length: 44 pages
Date of creation: 10 Oct 2012
Date of revision:
Handle: RePEc:hhs:osloec:2012_032

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Postal: Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway
Phone: 22 85 51 27
Fax: 22 85 50 35
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Web page: http://www.oekonomi.uio.no/indexe.html
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Keywords: Physicians’ labor supply; multi-sector; panel data;

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References

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  1. 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.
  2. Midttun, Linda, 2007. "Private or public? An empirical analysis of the importance of work values for work sector choice among Norwegian medical specialists," Social Science & Medicine, Elsevier, vol. 64(6), pages 1265-1277, March.
  3. Baltagi, Badi H. & Bratberg, Espen & Holmås, Tor Helge, 2003. "A panel data study of physicians’ labor supply: The case of Norway," Working Papers in Economics 01/03, University of Bergen, Department of Economics.
  4. Gjerberg, Elisabeth, 2001. "Medical women -- towards full integration? An analysis of the specialty choices made by two cohorts of Norwegian doctors," Social Science & Medicine, Elsevier, vol. 52(3), pages 331-343, February.
  5. Jostein Grytten & Fredrik Carlsen & Irene Skau, 2008. "Primary physicians’ response to changes in fees," The European Journal of Health Economics, Springer, vol. 9(2), pages 117-125, May.
  6. Geir Godager & Tor Iversen & Ching-To Ma, 2009. "Service motives and profit incentives among physicians," International Journal of Health Care Finance and Economics, Springer, vol. 9(1), pages 39-57, March.
  7. 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.
  8. John K. Dagsvik & Steinar Strøm, 2004. "Sectoral Labor Supply, Choice Restrictions and Functional Form," Discussion Papers 388, Research Department of Statistics Norway.
  9. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521766555, April.
  10. John K. Dagsvik, 2002. "Discrete Choice in Continuous Time: Implications of an Intertemporal Version of the Iia Property," Econometrica, Econometric Society, vol. 70(2), pages 817-831, March.
  11. Rizzo, John A. & Blumenthal, David, 1994. "Physician labor supply: Do income effects matter?," Journal of Health Economics, Elsevier, vol. 13(4), pages 433-453.
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