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Public, Private or Both? Analysing Factors Influencing the Labour Supply of Medical Specialists

  • Cheng, Terence Chai

    ()

    (University of Adelaide)

  • Kalb, Guyonne

    ()

    (Melbourne Institute of Applied Economic and Social Research)

  • Scott, Anthony

    ()

    (Melbourne Institute of Applied Economic and Social Research)

This paper investigates the factors influencing the allocation of time between public and private sectors by medical specialists. A discrete choice structural labour supply model is estimated, where specialists choose from a set of job packages that are characterised by the number of working hours in the public and private sectors. The results show that medical specialists respond to changes in earnings by reallocating working hours to the sector with relatively higher earnings, while leaving total working hours unchanged. The magnitudes of the own-sector and cross-sector earnings elasticities fall in the range of 0.21-0.54, and are larger for male than for female specialists. The labour supply response varies by doctors' age and medical specialty. Family circumstances such as the presence of young dependent children influence the hours worked by female specialists but not male specialists. We illustrate the relevance of our findings by simulating the impact of recent trends in earnings growth in the public and private sectors.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7766.

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Length: 29 pages
Date of creation: Nov 2013
Date of revision:
Handle: RePEc:iza:izadps:dp7766
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  1. Arthur van Soest, 1995. "Structural Models of Family Labor Supply: A Discrete Choice Approach," Journal of Human Resources, University of Wisconsin Press, vol. 30(1), pages 63-88.
  2. Denise Doiron & Guyonne Kalb, 2004. "Demands for Childcare and Household Labour Supply in Australia," Melbourne Institute Working Paper Series wp2004n06, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
  3. Badi H. Baltagi & Espen Bratberg & Tor Helge Holmås, 2003. "A Panel Data Study of Physicians’ Labor Supply: The Case of Norway," CESifo Working Paper Series 895, CESifo Group Munich.
  4. Paula González & Inés Macho-Stadler, 2011. "A Theoretical Approach to Dual Practice Regulations in the Health Sector," Working Papers 11.01, Universidad Pablo de Olavide, Department of Economics.
  5. Mincer, Jacob, 1997. "The Production of Human Capital and the Life Cycle of Earnings: Variations on a Theme," Journal of Labor Economics, University of Chicago Press, vol. 15(1), pages S26-47, January.
  6. Terence Chai Cheng & Anthony Scott & Sung‐Hee Jeon & Guyonne Kalb & John Humphreys & Catherine Joyce, 2012. "What Factors Influence The Earnings Of General Practitioners And Medical Specialists? Evidence From The Medicine In Australia: Balancing Employment And Life Survey," Health Economics, John Wiley & Sons, Ltd., vol. 21(11), pages 1300-1317, November.
  7. Showalter, Mark H. & Thurston, Norman K., 1997. "Taxes and labor supply of high-income physicians," Journal of Public Economics, Elsevier, vol. 66(1), pages 73-97, October.
  8. Socha, Karolina Z. & Bech, Mickael, 2011. "Physician dual practice: A review of literature," Health Policy, Elsevier, vol. 102(1), pages 1-7, September.
  9. Humphrey, Charlotte & Russell, Jill, 2004. "Motivation and values of hospital consultants in south-east England who work in the national health service and do private practice," Social Science & Medicine, Elsevier, vol. 59(6), pages 1241-1250, September.
  10. Wenda Yan & Terence Chai Cheng & Anthony Scott & Catherine M. Joyce & John Humphreys & Guyonne Kalb & Anne Leahy, 2011. "Medicine in Australia: Balancing Employment and Life (MABEL)," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 44(1), pages 102-112, 03.
  11. Garcia-Prado, Ariadna & Gonzalez, Paula, 2007. "Policy and regulatory responses to dual practice in the health sector," Health Policy, Elsevier, vol. 84(2-3), pages 142-152, December.
  12. Cheng, Terence C. & Joyce, Catherine M. & Scott, Anthony, 2013. "An empirical analysis of public and private medical practice in Australia," Health Policy, Elsevier, vol. 111(1), pages 43-51.
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