Do Medical Doctors Respond to Economic Incentives?

41 Pages Posted: 3 May 2012

See all articles by Leif Andreassen

Leif Andreassen

Statistics Norway - Research Department

Maria L. Di Tommaso

Department of Economics "Cognetti de Martiis"

Steinar Strøm

University of Oslo - Ragnar Frisch Centre for Economic Research; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: April 30, 2012

Abstract

A longitudinal analysis of married physicians labor supply is carried out on Norwegian data from 1997 to 1999. The model utilized for estimation implies that physicians can choose among 10 different job packages which are a combination of part time/full time, hospital/primary care, private/public sector, and not working. Their current choice is influenced by past available options due to a taste persistence parameter in the utility function. In the estimation we take into account the budget constraint, including all features of the tax system. Our results imply that an overall wage increase or a tax cut moves married physicians towards full time job packages, in particular to full time jobs in the private sector. But the overall and aggregate labor supply elasticities in the population of employed doctors are rather low compared to previous estimates.

Keywords: physicians’ labor supply, multi-sector, panel data

JEL Classification: J220, I100, C350

Suggested Citation

Andreassen, Leif and Di Tommaso, Maria L. and Strøm, Steinar, Do Medical Doctors Respond to Economic Incentives? (April 30, 2012). CESifo Working Paper Series No. 3802. Available at SSRN: https://ssrn.com/abstract=2050325

Leif Andreassen

Statistics Norway - Research Department ( email )

Kongens Gt. 6
PO Box 8131 Dep
N-0033 Oslo
Norway

Maria L. Di Tommaso

Department of Economics "Cognetti de Martiis" ( email )

Via Po 53
10124 Torino
Italy

Steinar Strøm (Contact Author)

University of Oslo - Ragnar Frisch Centre for Economic Research ( email )

Gaustadalleen 21
N-0317 Oslo
Norway

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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