Do Dutch Dentists Extract Monopoly Rents?

36 Pages Posted: 26 Feb 2018

See all articles by Nadine Ketel

Nadine Ketel

Vrije Universiteit Amsterdam; University of Gothenburg - Department of Economics and Statistics; IZA Institute of Labor Economics; University of Amsterdam; Tinbergen Institute; CEPR

Edwin Leuven

University of Oslo - Department of Economics

Hessel Oosterbeek

University of Amsterdam - Research Institute in Economics & Econometrics (RESAM); Tinbergen Institute Amsterdam (TIA); Institute for the Study of Labor (IZA)

Bas Klaauw

VU University Amsterdam

Multiple version iconThere are 2 versions of this paper

Date Written: February 2018

Abstract

We exploit admission lotteries to estimate the payoffs to the dentistry study in the Netherlands. Using data from up to 22 years after the lottery, we find that in most years after graduation dentists earn around 50,000 Euros more than they would earn in their next-best profession. The payoff is larger for men than for women but does not vary with high school GPA. The large payoffs cannot be attributed to longer working hours, larger human capital investments or sacrifices in family outcomes. The natural explanation is that Dutch dentists extract a monopoly rent, which we attribute to the limited supply of dentists in the Netherlands. We discuss policies to curtail this rent.

Keywords: dentists, monopoly rents, random assignment, Returns to education

JEL Classification: C36, I18, I23, J44

Suggested Citation

Ketel, Nadine and Leuven, Edwin and Oosterbeek, Hessel and Klaauw, Bas, Do Dutch Dentists Extract Monopoly Rents? (February 2018). CEPR Discussion Paper No. DP12738, Available at SSRN: https://ssrn.com/abstract=3130177

Nadine Ketel (Contact Author)

Vrije Universiteit Amsterdam ( email )

De Boelelaan 1105
Amsterdam, 1081HV
Netherlands

University of Gothenburg - Department of Economics and Statistics ( email )

Box 640
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Göteborg, 40530
Sweden

IZA Institute of Labor Economics ( email )

P.O. Box 7240
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Germany

University of Amsterdam ( email )

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Tinbergen Institute ( email )

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Netherlands

CEPR ( email )

London
United Kingdom

Edwin Leuven

University of Oslo - Department of Economics ( email )

P.O. Box 1095 Blindern
N-0317 Oslo
Norway

Hessel Oosterbeek

University of Amsterdam - Research Institute in Economics & Econometrics (RESAM) ( email )

Roetersstraat 11
Amsterdam
Netherlands
+31 20 525 4242 (Phone)
+31 20 525 5283 (Fax)

HOME PAGE: http://www.fee.uva.nl/scholar/oosterbeek/

Tinbergen Institute Amsterdam (TIA)

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

Institute for the Study of Labor (IZA)

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

Bas Klaauw

VU University Amsterdam ( email )

De Boelelaan 1105
Amsterdam, ND North Holland 1081 HV
Netherlands

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