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A Discrete Choice Analysis of Norwegian Physicians’ Labor Supply and Sector Choice

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  • Sæther, Erik Magnus

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    (Ragnar Frisch Centre for Economic Research)

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    Abstract

    What is the effect of increased wages on physician’s working hours and sector choice? This study applies an econometric framework that allows for non-convex budget sets, nonlinear labor supply curves and imperfect markets with institutional constraints. The physicians are assumed to make choices from a finite set of job possibilities, characterized by practice form, hours and wage rates. The individuals may combine their main position with an extra job, opening for a variety of combinations of hours in the respective jobs. I take into account the complicated payment schemes for physicians, taxes and household characteristics when estimating labor supply on Norwegian micro data. The results show a modest response in total hours to a wage increase, but a reallocation of hours in favor of the sector with increased wages.

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    File URL: http://www.hero.uio.no/publicat/2003/HERO2003_19.pdf
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    Bibliographic Info

    Paper provided by Oslo University, Health Economics Research Programme in its series HERO On line Working Paper Series with number 2003:19.

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    Length: 47 pages
    Date of creation: 22 Jun 2009
    Date of revision:
    Handle: RePEc:hhs:oslohe:2003_019

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    Postal: HERO / Institute of Health Management and Health Economics P.O. Box 1089 Blindern, N-0317 Oslo, Norway
    Phone: 2307 5309
    Fax: 2307 5310
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    Web page: http://www.hero.uio.no/eng.html
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    Keywords: Physicians; discrete choice; labor supply;

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    1. 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.
    2. Badi H. Baltagi & Espen Bratberg & Tor Helge Holmås, 2005. "A panel data study of physicians' labor supply: the case of Norway," Health Economics, John Wiley & Sons, Ltd., vol. 14(10), pages 1035-1045.
    3. 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.
    4. Feldstein, Martin, 1995. "Effect of Marginal Tax Rates on Taxable Income: A Panel Study of the 1986 Tax Reform Act," Scholarly Articles 2766676, Harvard University Department of Economics.
    5. Iversen, Tor, 1997. "The effect of a private sector on the waiting time in a national health service," Journal of Health Economics, Elsevier, vol. 16(4), pages 381-396, August.
    6. Feldstein, Martin, 1995. "The Effect of Marginal Tax Rates on Taxable Income: A Panel Study of the 1986 Tax Reform Act," Journal of Political Economy, University of Chicago Press, vol. 103(3), pages 551-72, June.
    7. Roed, Knut & Strom, Steinar, 2002. " Progressive Taxes and the Labour Market: Is the Trade-Off between Equality and Efficiency Inevitable?," Journal of Economic Surveys, Wiley Blackwell, vol. 16(1), pages 77-110, February.
    8. Aaberge, R. & Colombino, U. & Strom, S. & Wennemo, T., 1998. "Evaluating alternative tax reforms in Italy with a model of joint labor supply of married couples," Structural Change and Economic Dynamics, Elsevier, vol. 9(4), pages 415-433, December.
    9. 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.
    10. Aaberge, Rolf & Colombino, Ugo & Strom, Steinar, 1999. "Labour Supply in Italy: An Empirical Analysis of Joint Household Decisions, with Taxes and Quantity Constraints," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 14(4), pages 403-22, July-Aug..
    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.
    12. Aaberge, Rolf & Dagsvik, John K & Strom, Steinar, 1995. " Labor Supply Responses and Welfare Effects of Tax Reforms," Scandinavian Journal of Economics, Wiley Blackwell, vol. 97(4), pages 635-59, December.
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