Dual Practice by Health Workers: Theory and Evidence from Indonesia
53 Pages Posted: 2 Oct 2017
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.
Keywords: dual practice of health professionals, Ministry of Health Regulation, weak monitoring, motivation, opportunity costs of public service, Indonesia
JEL Classification: I1O, I18, J2, J44, J45, O1
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