Damage Caps and the Labor Supply of Physicians: Evidence from the Third Reform Wave
nearly final version, published in 18 American Law and Economics Review 463-505 (2016)
36 Pages Posted: 23 Jul 2014 Last revised: 14 Oct 2016
Date Written: June 22, 2016
Nine states adopted caps on non-economic damages during the third medical malpractice reform wave from 2002-2005, joining twenty-two other states with caps on non-economic or total damages. We study the effects of these reforms on physician supply. Across a variety of difference-in-differences (DiD), triple differences, and synthetic control methods, in both state- and county-level regressions, we find, with tight confidence intervals, no evidence that cap adoption leads to an increase in total patient care physicians, increases in specialties that face high liability risk (with a possible exception for plastic surgeons), nor increases in in rural physicians.
The online appendix is available from SSRN at http://ssrn.com/abstract=2761901.
Keywords: medical malpractice, tort reform, physician supply
JEL Classification: I11, I18, K23, K32
Suggested Citation: Suggested Citation