Where Have All the Good Doctors Gone? Testing Theories of Spatial Sorting Using Medical School Rank of Medical Doctors in California

Abstract

Recent research suggests multiple causes for the spatial variation of human capital observed both among and within cities. This paper studies the location choice of medical doctors in the same industry, specialty, and state, measuring a doctor's human capital through their medical school's rank. The empirical design allows for testing the relation between spatial variation in real estate costs and human capital in isolation from other plausible causes. Empirical results strongly suggest there is a pure human capital effect of real estate costs that is independent of other theories identified in the literature. Further, the findings are consistent Roback‘s(1988) hypothesis that real estate costs have different effects on workers with different human capital.

Note: The analysis, conclusions, and opinions set forth here are those of the author alone and do not necessarily reflect the views of the Federal Deposit Insurance Corporation or George Washington University.

Keywords: human capital, externality, skill intensity, Rosen-Roback, income elasticity, returns to skill

JEL Classification: J24, R12, R13