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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

  • Adriana Kugler
  • Robert Sauer

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 provides an exogenous source of variation in re-licensing outcomes. Instrumental variables and quantile treatment effects estimates of the returns to an occupational license indicate excess wages due to occupational entry restrictions and negative selection into licensing status. We develop a model of optimal license acquisition which suggests that the wages of high-skilled immigrant physicians in the nonphysician sector outweigh the lower direct costs that these immigrants face in acquiring a medical license. Licensing thus leads to lower average quality of service. However, the positive earnings effect of entry restrictions far outweighs the lower practitioner quality earnings effect that licensing induces.

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Bibliographic Info

Paper provided by Department of Economics and Business, Universitat Pompeu Fabra in its series Economics Working Papers with number 648.

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Date of creation: Oct 2002
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Handle: RePEc:upf:upfgen:648

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Web page: http://www.econ.upf.edu/

Related research

Keywords: Licensing; occupational mobility; regulation; information and product quality; immigration; regression dicontinuity design; quantile regression; quantile treatment effects;

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Cited by:
  1. Angrist, Joshua & Guryan, Jonathan, 2005. "Does Teacher Testing Raise Teacher Quality? Evidence from State Certification Requirements," IZA Discussion Papers 1500, Institute for the Study of Labor (IZA).
  2. 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.

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