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Dual Practice by Health Workers: Theory and Evidence from Indonesia

Author

Listed:
  • Paula González

    () (Department of Economics, Universidad Pablo de Olavide)

  • Gabriel Montes-Rojas

    () (CONICET-IIEP-BAIRES, Universidad de Buenos Aires.)

  • Sarmistha Pal

    () (Department of Finance, University of Surrey)

Abstract

Using a simple theoretical model we conjecture that dual practice may increase the number of patients seen but reduce hours spent at public facilities, if public physicians lack motivation and/or if their opportunity costs are very large. Using data from Indonesia, we then test these theoretical conjectures. Our identification strategy relies on a 1997 legislation necessitating health professionals to apply for license for private practice only after three years of graduation. Results using a difference-in-difference regression discontinuity design provides support to our conjectures, identifying the role of weak work discipline, lack of motivation and opportunity costs of public service provision.

Suggested Citation

  • Paula González & Gabriel Montes-Rojas & Sarmistha Pal, 2017. "Dual Practice by Health Workers: Theory and Evidence from Indonesia," Working Papers 17.12, Universidad Pablo de Olavide, Department of Economics.
  • Handle: RePEc:pab:wpaper:17.12
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    References listed on IDEAS

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    1. Paxson, Christina H & Sicherman, Nachum, 1996. "The Dynamics of Dual Job Holding and Job Mobility," Journal of Labor Economics, University of Chicago Press, vol. 14(3), pages 357-393, July.
    2. Gary Biglaiser & Ching-to Albert Ma, 2007. "Moonlighting: public service and private practice," RAND Journal of Economics, RAND Corporation, vol. 38(4), pages 1113-1133, December.
    3. González, Paula & Macho-Stadler, Inés, 2013. "A theoretical approach to dual practice regulations in the health sector," Journal of Health Economics, Elsevier, vol. 32(1), pages 66-87.
    4. Jishnu Das & Jeffrey Hammer & Kenneth Leonard, 2008. "The Quality of Medical Advice in Low-Income Countries," Journal of Economic Perspectives, American Economic Association, vol. 22(2), pages 93-114, Spring.
    5. Eggleston, Karen & Bir, Anupa, 2006. "Physician dual practice," Health Policy, Elsevier, vol. 78(2-3), pages 157-166, October.
    6. Fajnzylber, Pablo & Maloney, William F. & Montes-Rojas, Gabriel V., 2011. "Does formality improve micro-firm performance? Evidence from the Brazilian SIMPLES program," Journal of Development Economics, Elsevier, vol. 94(2), pages 262-276, March.
    7. David S. Lee & Thomas Lemieux, 2010. "Regression Discontinuity Designs in Economics," Journal of Economic Literature, American Economic Association, vol. 48(2), pages 281-355, June.
    8. Pedro Pita Barros & Pau Olivella, 2005. "Waiting Lists and Patient Selection," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 14(3), pages 623-646, September.
    9. Jishnu Das & Jeffrey Hammer, 2014. "Quality of Primary Care in Low-Income Countries: Facts and Economics," Annual Review of Economics, Annual Reviews, vol. 6(1), pages 525-553, August.
    10. Socha, Karolina Z. & Bech, Mickael, 2011. "Physician dual practice: A review of literature," Health Policy, Elsevier, vol. 102(1), pages 1-7, September.
    11. Kurt R. Brekke & Lars Sørgard, 2006. "Public versus Private Health Care in a National Health Service," CESifo Working Paper Series 1679, CESifo Group Munich.
    12. Kurt R. Brekke & Lars Sørgard, 2007. "Public versus private health care in a national health service," Health Economics, John Wiley & Sons, Ltd., vol. 16(6), pages 579-601.
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    More about this item

    Keywords

    Dual practice of health professionals; Ministry of health regulation; Weak monitoring; Motivation; Opportunity costs of public service; Indonesia;

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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