IDEAS home Printed from https://ideas.repec.org/a/aea/aejapp/v8y2016i2p225-54.html

The Returns to Medical School: Evidence from Admission Lotteries

Author

Listed:
  • Nadine Ketel
  • Edwin Leuven
  • Hessel Oosterbeek
  • Bas van der Klaauw

Abstract

We exploit admission lotteries to estimate the returns to medical school in the Netherlands. Using data from up to 22 years after the lottery, we find that in every single year after graduation doctors earn at least 20 percent more than people who end up in their next-best occupation. Twenty-two years after the lottery the earnings difference is almost 50 percent. Only a small fraction of this difference can be attributed to differences in working hours and human capital investments. The returns do not vary with gender or ability, and shift the entire earnings distribution. (JEL D44, I11, I26, J24, J31, J44)

Suggested Citation

  • Nadine Ketel & Edwin Leuven & Hessel Oosterbeek & Bas van der Klaauw, 2016. "The Returns to Medical School: Evidence from Admission Lotteries," American Economic Journal: Applied Economics, American Economic Association, vol. 8(2), pages 225-254, April.
    • Handle: RePEc:aea:aejapp:v:8:y:2016:i:2:p:225-54
    Note: DOI: 10.1257/app.20140506
    as

    Download full text from publisher

    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/app.20140506
    Download Restriction: no
    File URL: https://www.aeaweb.org/aej/app/data/0802/2014-0506_data.zip
    Download Restriction: no
    File URL: https://www.aeaweb.org/aej/app/ds/0802/2014-0506_ds.zip
    Download Restriction: Access to full text is restricted to AEA members and institutional subscribers.
    ---><---

    References listed on IDEAS

    as
    1. Anderson, Gary M. & Halcoussis, Dennis & Johnston, Linda & Lowenberg, Anton D., 2000. "Regulatory barriers to entry in the healthcare industry: the case of alternative medicine," The Quarterly Review of Economics and Finance, Elsevier, vol. 40(4), pages 485-502.
    2. Joseph G. Altonji & Erica Blom & Costas Meghir, 2012. "Heterogeneity in Human Capital Investments: High School Curriculum, College Major, and Careers," Annual Review of Economics, Annual Reviews, vol. 4(1), pages 185-223, July.
    3. Adriana D. Kugler & Robert M. Sauer, 2005. "Doctors without Borders? Relicensing Requirements and Negative Selection in the Market for Physicians," Journal of Labor Economics, University of Chicago Press, vol. 23(3), pages 437-466, July.
    4. Justine S. Hastings & Christopher A. Neilson & Seth D. Zimmerman, 2013. "Are Some Degrees Worth More than Others? Evidence from college admission cutoffs in Chile," NBER Working Papers 19241, National Bureau of Economic Research, Inc.
    5. Rie Fujisawa & Gaétan Lafortune, 2008. "The Remuneration of General Practitioners and Specialists in 14 OECD Countries: What are the Factors Influencing Variations across Countries?," OECD Health Working Papers 41, OECD Publishing.
    6. repec:mpr:mprres:5058 is not listed on IDEAS
    7. Guido W. Imbens & Donald B. Rubin, 1997. "Estimating Outcome Distributions for Compliers in Instrumental Variables Models," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 64(4), pages 555-574.
    8. Morris M. Kleiner & Alan B. Krueger, 2013. "Analyzing the Extent and Influence of Occupational Licensing on the Labor Market," Journal of Labor Economics, University of Chicago Press, vol. 31(S1), pages 173-202.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dustin Chambers & Colin O’Reilly, 2022. "The economic theory of regulation and inequality," Public Choice, Springer, vol. 193(1), pages 63-78, October.
    2. Kirkebøen, Lars & Leuven, Edwin & Mogstad, Magne, 2014. "Field of Study, Earnings, and Self-Selection," Memorandum 29/2014, Oslo University, Department of Economics.
    3. Artmann, Elisabeth & Ketel, Nadine & Oosterbeek, Hessel & van der Klaauw, Bas, 2018. "Field of Study and Family Outcomes," IZA Discussion Papers 11658, Institute of Labor Economics (IZA).
    4. Wei Chi & Morris M. Kleiner & Xiaoye Qian, 2017. "Do Occupational Regulations Increase Earnings? Evidence from China," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 56(2), pages 351-381, April.
    5. Artmann, Elisabeth & Ketel, Nadine & Oosterbeek, Hessel & van der Klaauw, Bas, 2021. "Field of study and partner choice," Economics of Education Review, Elsevier, vol. 84(C).
    6. Ketel, Nadine & Leuven, Edwin & Oosterbeek, Hessel & van der Klaauw, Bas, 2019. "Do Dutch dentists extract monopoly rents?," Journal of Health Economics, Elsevier, vol. 63(C), pages 145-158.
    7. Tarun Jain & Abhiroop Mukhopadhyay & Nishith Prakash & Raghav Rakesh, 2022. "Science education and labor market outcomes in a developing economy," Economic Inquiry, Western Economic Association International, vol. 60(2), pages 741-763, April.
    8. Bordon, Paola & Fu, Chao, 2015. "College-Major Choice to College-Then-Major Choice," MPRA Paper 79643, University Library of Munich, Germany.
    9. Sungjin Cho & Jihye Kam & Soohyung Lee, 2018. "Efficient Supply Of Human Capital: Role Of College Major," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 63(05), pages 1319-1343, December.
    10. Adam Altmejd & Andrés Barrios-Fernández & Marin Drlje & Joshua Goodman & Michael Hurwitz & Dejan Kovac & Christine Mulhern & Christopher Neilson & Jonathan Smith, 2021. "O Brother, Where Start Thou? Sibling Spillovers on College and Major Choice in Four Countries," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 136(3), pages 1831-1886.
    11. Christopher Neilson & Adam Altmejd & Andres Barrios-Fernandez & Marin Drlje & Dejan Kovac, 2019. "Siblings' Effects on College and Major Choices: Evidence from Chile, Croatia and Sweden," Working Papers 633, Princeton University, Department of Economics, Industrial Relations Section..
    12. Richard W. Patterson & Nolan G. Pope & Aaron Feudo, 2019. "Timing is Everything: Evidence from College Major Decisons," CESifo Working Paper Series 7448, CESifo.
    13. Aguirre, Josefa & Matta, Juan, 2021. "Walking in your footsteps: Sibling spillovers in higher education choices," Economics of Education Review, Elsevier, vol. 80(C).
    14. John Eric Humphries & Juanna Schr¿ter Joensen & Gregory F. Veramendi, 2025. "Complementarities in High School and College Investments," Cowles Foundation Discussion Papers 2446, Cowles Foundation for Research in Economics, Yale University.
    15. Mumford, Kevin J. & Patterson, Richard & Yim, Anthony, 2024. "College Course Shutouts," IZA Discussion Papers 16859, Institute of Labor Economics (IZA).
    16. Di Paolo, Antonio & Tansel, Aysit, 2017. "Analyzing Wage Differentials by Fields of Study: Evidence from Turkey," GLO Discussion Paper Series 91, Global Labor Organization (GLO).
    17. Grosz, Michel, 2024. "Community colleges and careers: Evidence from nursing school lotteries," Labour Economics, Elsevier, vol. 90(C).
    18. Gordon Dahl & Dan-Olof Rooth & Anders Stenberg, 2020. "High School Majors, Comparative (Dis)Advantage, and Future Earnings," NBER Working Papers 27524, National Bureau of Economic Research, Inc.
    19. Sofoklis Goulas & Rigissa Megalokonomou, 2019. "Which degrees do students prefer during recessions?," Empirical Economics, Springer, vol. 56(6), pages 2093-2125, June.
    20. Clint Harris, 2022. "Interpreting Instrumental Variable Estimands with Unobserved Treatment Heterogeneity: The Effects of College Education," Papers 2211.13132, arXiv.org.

    More about this item

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aea:aejapp:v:8:y:2016:i:2:p:225-54. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Michael P. Albert (email available below). General contact details of provider: https://edirc.repec.org/data/aeaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.