IDEAS home Printed from https://ideas.repec.org/p/hhs/gunwpe/0721.html
   My bibliography  Save this paper

Do Dutch dentists extract monopoly rents?

Author

Listed:
  • Ketel, Nadine

    (Department of Economics, School of Business, Economics and Law, Göteborg University)

  • Leuven, Edwin

    (Department of Economics, University of Oslo)

  • Oosterbeek, Hessel

    (University of Amsterdam, School of Economics)

  • van der Klaauw, Bas

    (Department of Economics, VU University, Amsterdam)

Abstract

We exploit admission lotteries to estimate the payoffs to the dentistry study in the Netherlands. Using data from up to 22 years after the lottery, we find that in most years after graduation dentists earn around 50,000 Euros more than they would earn in their next-best profession. The payoff is larger for men than for women but does not vary with high school GPA. The large payoffs cannot be attributed to longer working hours, larger human capital investments or sacrifices in family outcomes. The natural explanation is that Dutch dentists extract a monopoly rent, which we attribute to the limited supply of dentists in the Netherlands. We discuss policies to curtail this rent.

Suggested Citation

  • Ketel, Nadine & Leuven, Edwin & Oosterbeek, Hessel & van der Klaauw, Bas, 2018. "Do Dutch dentists extract monopoly rents?," Working Papers in Economics 721, University of Gothenburg, Department of Economics.
    • Handle: RePEc:hhs:gunwpe:0721
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/2077/55602
    File Function: Full text
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Lars J. Kirkeboen & Edwin Leuven & Magne Mogstad, 2016. "Editor's Choice Field of Study, Earnings, and Self-Selection," The Quarterly Journal of Economics, Oxford University Press, vol. 131(3), pages 1057-1111.
    2. Hartog, Joop & Oosterbeek, Hessel, 1993. "Public and private sector wages in the Netherlands," European Economic Review, Elsevier, vol. 37(1), pages 97-114, January.
    3. Jostein Grytten & Rune Sørensen, 2000. "Competition and dental services," Health Economics, John Wiley & Sons, Ltd., vol. 9(5), pages 447-461, July.
    4. 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.
    5. Jake Bradley & Fabien Postel-Vinay & Hélène Turon, 2017. "Public Sector Wage Policy and Labor Market Equilibrium: A Structural Model," Journal of the European Economic Association, European Economic Association, vol. 15(6), pages 1214-1257.
    6. 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.
    7. Imbens, Guido W & Angrist, Joshua D, 1994. "Identification and Estimation of Local Average Treatment Effects," Econometrica, Econometric Society, vol. 62(2), pages 467-475, March.
    8. Abadie, Alberto, 2003. "Semiparametric instrumental variable estimation of treatment response models," Journal of Econometrics, Elsevier, vol. 113(2), pages 231-263, April.
    9. 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.
    10. Shepard, Lawrence, 1978. "Licensing Restrictions and the Cost of Dental Care," Journal of Law and Economics, University of Chicago Press, vol. 21(1), pages 187-201, April.
    11. repec:mpr:mprres:5058 is not listed on IDEAS
    12. Morris M. Kleiner, 2000. "Occupational Licensing," Journal of Economic Perspectives, American Economic Association, vol. 14(4), pages 189-202, Fall.
    13. Kleiner, Morris M & Kudrle, Robert T, 2000. "Does Regulation Affect Economic Outcomes? The Case of Dentistry," Journal of Law and Economics, University of Chicago Press, vol. 43(2), pages 547-582, October.
    14. Kirkebøen, Lars & Leuven, Edwin & Mogstad, Magne, 2014. "Field of Study, Earnings, and Self-Selection," Memorandum 29/2014, Oslo University, Department of Economics.
    15. Joseph G. Altonji & Peter Arcidiacono & Arnaud Maurel, 2015. "The Analysis of Field Choice in College and Graduate School: Determinants and Wage Effects," NBER Working Papers 21655, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. 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).
    2. Anna-Lena Trescher & Stefan Listl & Onno Galien & Frank Gabel & Olivier Kalmus, 2020. "Once bitten, twice shy? Lessons learned from an experiment to liberalize price regulations for dental care," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 21(3), pages 425-436, April.

    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. 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, Oxford University Press, vol. 136(3), pages 1831-1886.
    2. Jain, Tarun & Mukhopadhyay, Abhiroop & Prakash, Nishith & Rakesh, Raghav, 2018. "Labor Market Effects of High School Science Majors in a High STEM Economy," IZA Discussion Papers 11908, Institute of Labor Economics (IZA).
    3. John Eric Humphries & Juanna Joensen & Gregory Veramendi, 2017. "College Major Choice: Sorting and Differential Returns to Skills," 2017 Meeting Papers 1623, Society for Economic Dynamics.
    4. Di Paolo, Antonio & Tansel, Aysit, 2017. "Analyzing Wage Differentials by Fields of Study: Evidence from Turkey," MPRA Paper 80299, University Library of Munich, Germany.
    5. Joshua Goodman, 2019. "The Labor of Division: Returns to Compulsory High School Math Coursework," Journal of Labor Economics, University of Chicago Press, vol. 37(4), pages 1141-1182.
    6. 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).
    7. 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..
    8. Kirkebøen, Lars & Leuven, Edwin & Mogstad, Magne, 2014. "Field of Study, Earnings, and Self-Selection," Memorandum 29/2014, Oslo University, Department of Economics.
    9. Shimeng Liu & Weizeng Sun & John V. Winters, 2019. "Up In Stem, Down In Business: Changing College Major Decisions With The Great Recession," Contemporary Economic Policy, Western Economic Association International, vol. 37(3), pages 476-491, July.
    10. Fricke, Hans & Grogger, Jeffrey & Steinmayr, Andreas, 2015. "Does Exposure to Economics Bring New Majors to the Field? Evidence from a Natural Experiment," IZA Discussion Papers 9003, Institute of Labor Economics (IZA).
    11. Arpita Patnaik & Matthew J. Wiswall & Basit Zafar, 2020. "College Majors," NBER Working Papers 27645, National Bureau of Economic Research, Inc.
    12. Xia, Xing, 2021. "Barrier to Entry or Signal of Quality? The Effects of Occupational Licensing on Minority Dental Assistants," Labour Economics, Elsevier, vol. 71(C).
    13. Fernanda Estevan & Thomas Gall & Louis-Philippe Morin, 2019. "Can Affirmative Action Affect Major Choice?," Boston University - Department of Economics - The Institute for Economic Development Working Papers Series dp-324, Boston University - Department of Economics.
    14. Pagliero, Mario, 2013. "The impact of potential labor supply on licensing exam difficulty," Labour Economics, Elsevier, vol. 25(C), pages 141-152.
    15. Rodney J. Andrews & Scott A. Imberman & Michael F. Lovenheim, 2017. "Risky Business? The Effect of Majoring in Business on Earnings and Educational Attainment," NBER Working Papers 23575, National Bureau of Economic Research, Inc.
    16. Heinesen, Eskil, 2018. "Admission to higher education programmes and student educational outcomes and earnings–Evidence from Denmark," Economics of Education Review, Elsevier, vol. 63(C), pages 1-19.
    17. Kerr, Sari Pekkala & Pekkarinen, Tuomas & Sarvimäki, Matti & Uusitalo, Roope, 2020. "Post-secondary education and information on labor market prospects: A randomized field experiment," Labour Economics, Elsevier, vol. 66(C).
    18. Han, Luyi & Winters, John V., 2020. "Industry Fluctuations and College Major Choices: Evidence from an Energy Boom and Bust," Economics of Education Review, Elsevier, vol. 77(C).
    19. David J Deming & Kadeem Noray, 2020. "Earnings Dynamics, Changing Job Skills, and STEM Careers," The Quarterly Journal of Economics, Oxford University Press, vol. 135(4), pages 1965-2005.
    20. Fernando Saltiel, 2019. "What's Math Got to Do With It? Multidimensional Ability and the Gender Gap in STEM," 2019 Meeting Papers 1201, Society for Economic Dynamics.

    More about this item

    Keywords

    Dentists; returns to education; monopoly rents; random assignment;
    All these keywords.

    JEL classification:

    • C36 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Instrumental Variables (IV) Estimation
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:hhs:gunwpe:0721. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/naiguse.html .

    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: Ann-Christin Räätäri Nyström (email available below). General contact details of provider: https://edirc.repec.org/data/naiguse.html .

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.