Dual Practice by Health Workers: Theory and Evidence from Indonesia

53 Pages Posted: 2 Oct 2017

See all articles by Paula González

Paula González

Universidad Pablo de Olavide

Gabriel V. Montes Rojas

University of Illinois at Urbana-Champaign

Sarmistha Pal

University of Surrey; IZA Institute of Labor Economics

Abstract

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

Suggested Citation

González, Paula and Montes Rojas, Gabriel V. and Pal, Sarmistha, Dual Practice by Health Workers: Theory and Evidence from Indonesia. IZA Discussion Paper No. 11038, Available at SSRN: https://ssrn.com/abstract=3045734

Paula González (Contact Author)

Universidad Pablo de Olavide

UNIVERSIDAD PABLO DE OLAVIDE. DEPARTAMENTO DE ECON
SEVILLA, Seville 41013
Spain

Gabriel V. Montes Rojas

University of Illinois at Urbana-Champaign ( email )

601 E John St
Champaign, IL 61820
United States

Sarmistha Pal

University of Surrey ( email )

Stag Hill
Guildford, England GU2 7XH
United Kingdom
01483 683995 (Phone)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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