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A developed theoretical model of paid and unpaid work in healthcare supply

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  • Yan Feng

    (Office of Health Economics)

Abstract

We investigate how the increase in the rate of performance related payment affects the healthcare supply in paid and unpaid work. The developed theoretical model shows that a higher price incentivises the supply of paid work. Its impact on unpaid work is determined by the trade-off between crowding effect, effects of the increased opportunity costs and available income. This note provides one of the first attempts in health economics to incorporate the crowding effect and opportunity costs of supply unpaid work into health providers' utility functions and to consider the effect of a change in income within this theoretical framework.

Suggested Citation

  • Yan Feng, 2012. "A developed theoretical model of paid and unpaid work in healthcare supply," Economics Bulletin, AccessEcon, vol. 32(4), pages 3082-3089.
    • Handle: RePEc:ebl:ecbull:eb-12-00694
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    File URL: http://www.accessecon.com/Pubs/EB/2012/Volume32/EB-12-V32-I4-P295.pdf
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    References listed on IDEAS

    as
    1. Chalkley, Martin & Malcomson, James M., 1998. "Contracting for health services when patient demand does not reflect quality," Journal of Health Economics, Elsevier, vol. 17(1), pages 1-19, January.
    2. Siciliani, Luigi, 2009. "Paying for performance and motivation crowding out," Economics Letters, Elsevier, vol. 103(2), pages 68-71, May.
    3. Le Grand, Julian, 2003. "Motivation, Agency, and Public Policy: Of Knights and Knaves, Pawns and Queens," OUP Catalogue, Oxford University Press, number 9780199266999, Decembrie.
    4. Bruno S. Frey, 1997. "Not Just for the Money," Books, Edward Elgar Publishing, number 1183.
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    Keywords

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    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • H4 - Public Economics - - Publicly Provided Goods

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