Doctors Without Borders: The Returns to an Occupational License for Soviet Immigrant Physicians in Israel

43 Pages Posted: 24 Jan 2003

See all articles by Adriana D. Kugler

Adriana D. Kugler

McCourt School of Public Policy ; Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics; National Bureau of Economic Research (NBER)

Robert M. Sauer

University of London - Royal Holloway College

Date Written: January 2002

Abstract

Re-licensing requirements for professionals that move across borders are widespread. In this Paper, we measure the returns to an occupational license using novel data on Soviet trained physicians that immigrated to Israel. An immigrant re-training assignment rule used by the Israel Ministry of Health provides an exogenous source of variation in re-licensing outcomes. Instrumental variables and quantile treatment effects estimates of the returns to an occupational license indicate excess wages due to occupational entry restrictions and negative selection into licensing status. We develop a model of optimal license acquisition that suggests that the wages of high-skilled immigrant physicians in the non-physician sector outweigh the lower direct costs that these immigrants face in acquiring a medical license. Licensing thus leads to lower average quality of service. The positive earnings effect of entry restrictions far outweighs the lower practitioner quality earnings effect that licensing induces.

Keywords: Licensing, occupational mobility, regulation, information and product quality, immigration, regression discontinuity design, quantile regression, quantile treatment effects model

JEL Classification: D45, J24, J31, J61, J62, L15, L51

Suggested Citation

Kugler, Adriana Debora and Sauer, Robert M., Doctors Without Borders: The Returns to an Occupational License for Soviet Immigrant Physicians in Israel (January 2002). Available at SSRN: https://ssrn.com/abstract=371806

Adriana Debora Kugler (Contact Author)

McCourt School of Public Policy ( email )

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Centre for Economic Policy Research (CEPR) ( email )

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IZA Institute of Labor Economics ( email )

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National Bureau of Economic Research (NBER) ( email )

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Robert M. Sauer

University of London - Royal Holloway College ( email )

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