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Restrictions on the number of physicians and Intergenerational Inequalities : Experience, Time and Vintage effects in GPs’ earnings

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  • Brigitte Dormont
  • Anne-Laure Samson

Abstract

This paper analyses the regulation of ambulatory care and its impact on physicians’careers, using a representative panel of 6,016 French self-employed GPs over the 1983 - 2004 period. The beginning of their activity is infuenced by the regulated number of places in medical schools, named in France numerus clausus. We show that the policies aimed at manipulating the numerus clausus strongly affect physicians’ permanent level of earnings. Our estimates allow us to identify experience, time and vintage effects in physicians’ earnings. The estimated cohort (or vintage) effect appears to be very large, revealing that intergenerational inequalities due to fluctuations in the numerus clausus regulation are far from negligible. Cohorts of GPs beginning during the eighties have the lowest permanent earnings: they faced both the baby-boom numerous cohorts and the consequences of a high number of places in medical schools. Conversely, the decrease in the numerus clausus led to an increase in permanent earnings of GPs who began their practice in the mid nineties. Overall, the estimated gap in earnings between "good" and "bad" cohorts may reach 25%. We performed a more thorough analysis of the earnings distribution to examine whether individual unobserved heterogeneity could compensate for average differences between cohorts. Our results about stochastic dominance between earnings distributions by cohort show that it is not the case.

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  • Brigitte Dormont & Anne-Laure Samson, 2007. "Restrictions on the number of physicians and Intergenerational Inequalities : Experience, Time and Vintage effects in GPs’ earnings," Health, Econometrics and Data Group (HEDG) Working Papers 07/11, HEDG, c/o Department of Economics, University of York.
    • Handle: RePEc:yor:hectdg:07/11
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