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Gender Homophily in Referral Networks: Consequences for the Medicare Physician Earnings Gap

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  • Zeltzer, Dan

    () (Tel Aviv University)

Abstract

In this paper, I assess the extent to which the gender gap in physician earnings may be driven by physicians' preference for working with specialists of the same gender. By analyzing administrative data on 100 million Medicare patient referrals, I provide robust evidence that doctors refer more to specialists of their same gender, a tendency known as homophily. I propose a new measure of homophily that is invariant to differences between the genders in the propensity to refer or receive referrals. I show that biased referrals are predominantly driven by physicians' decisions rather than by endogenous sorting of physicians or patients or by gender differences in the labor supply. As 75% of doctors are men, estimates suggest biased referrals generate a 5% lower demand for female relative to male specialists, pointing to a positive externality for increased female participation in medicine.

Suggested Citation

  • Zeltzer, Dan, 2017. "Gender Homophily in Referral Networks: Consequences for the Medicare Physician Earnings Gap," IZA Discussion Papers 11230, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp11230
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    References listed on IDEAS

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    1. Shamena Anwar & Hanming Fang, 2006. "An Alternative Test of Racial Prejudice in Motor Vehicle Searches: Theory and Evidence," American Economic Review, American Economic Association, vol. 96(1), pages 127-151, March.
    2. Sergio Currarini & Matthew O. Jackson & Paolo Pin, 2009. "An Economic Model of Friendship: Homophily, Minorities, and Segregation," Econometrica, Econometric Society, vol. 77(4), pages 1003-1045, July.
    3. Ghazala Azmat & Rosa Ferrer Zarzuela, 2012. "Gender gaps in performance: Evidence from young lawyers," Economics Working Papers 1300, Department of Economics and Business, Universitat Pompeu Fabra, revised Oct 2015.
    4. Azmat, Ghazala & Petrongolo, Barbara, 2014. "Gender and the labor market: What have we learned from field and lab experiments?," Labour Economics, Elsevier, vol. 30(C), pages 32-40.
    5. Muriel Niederle & Lise Vesterlund, 2007. "Do Women Shy Away From Competition? Do Men Compete Too Much?," The Quarterly Journal of Economics, Oxford University Press, vol. 122(3), pages 1067-1101.
    6. Halberstam, Yosh & Knight, Brian, 2016. "Homophily, group size, and the diffusion of political information in social networks: Evidence from Twitter," Journal of Public Economics, Elsevier, vol. 143(C), pages 73-88.
    7. Stephen V. Burks & Bo Cowgill & Mitchell Hoffman & Michael Housman, 2015. "The Value of Hiring through Employee Referrals," The Quarterly Journal of Economics, Oxford University Press, vol. 130(2), pages 805-839.
    8. M. Keith Chen & Judith A. Chevalier, 2012. "Are Women Overinvesting in Education? Evidence from the Medical Profession," Journal of Human Capital, University of Chicago Press, vol. 6(2), pages 124-149.
    9. Leila Agha & Brigham Frandsen & James B. Rebitzer, 2017. "Causes and Consequences of Fragmented Care Delivery: Theory, Evidence, and Public Policy," NBER Working Papers 23078, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Hanming Fang & Qing Gong, 2017. "Detecting Potential Overbilling in Medicare Reimbursement via Hours Worked," American Economic Review, American Economic Association, vol. 107(2), pages 562-591, February.

    More about this item

    Keywords

    networks; referrals; gender; physician markets;

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

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