Who Values Human Capitalists’ Human Capital? The Earnings and Labor Supply of U.S. Physicians

104 Pages Posted: 18 Jul 2023 Last revised: 26 Jul 2023

See all articles by Joshua D. Gottlieb

Joshua D. Gottlieb

National Bureau of Economic Research (NBER); University of Chicago

Maria Polyakova

Stanford University

Kevin Rinz

University of Notre Dame

Hugh Shiplett

University of British Columbia (UBC) - Vancouver School of Economics

Victoria Udalova

University of Wisconsin - Madison - Department of Economics; Government of the United States of America - Bureau of the Census

Date Written: July 14, 2023

Abstract

Is government guiding the invisible hand at the top of the labor market? We use new administrative data to measure physicians’ earnings and estimate the influence of healthcare policies on these earnings, physicians’ labor supply, and allocation of talent. Combining the administrative registry of U.S. physicians with tax data, Medicare billing records, and survey responses, we find that physicians’ annual earnings average $350,000 and comprise 8.6% of national healthcare spending. The age-earnings profile is steep; business income comprises one-quarter of earnings and is systematically underreported in survey data. There are major differences in earnings across specialties, regions, and firm sizes, with an unusual geographic pattern compared with other workers. We show that health policy has a major impact on the margin: 25% of physician fee revenue driven by Medicare reimbursements accrues to physicians personally. Physicians earn 6% of public money spent on insurance expansions. We find that these policies in turn affect the type and quantity of medical care physicians supply in the short run; retirement timing in the medium run; and earnings affect specialty choice in the long run.

Suggested Citation

Gottlieb, Joshua D. and Gottlieb, Joshua D. and Polyakova, Maria and Rinz, Kevin and Shiplett, Hugh and Udalova, Victoria and Udalova, Victoria, Who Values Human Capitalists’ Human Capital? The Earnings and Labor Supply of U.S. Physicians (July 14, 2023). University of Chicago, Becker Friedman Institute for Economics Working Paper No. 2023-95, Available at SSRN: https://ssrn.com/abstract=4510223 or http://dx.doi.org/10.2139/ssrn.4510223

Joshua D. Gottlieb (Contact Author)

University of Chicago ( email )

1307 E. 60th St.
Chicago, IL 60637
United States

HOME PAGE: http://www.gottlieb.ca/

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
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HOME PAGE: http://papers.nber.org/authors/joshua_gottlieb

Maria Polyakova

Stanford University ( email )

Stanford, CA 94305
United States

Kevin Rinz

University of Notre Dame ( email )

361 Mendoza College of Business
Notre Dame, IN 46556-5646
United States

Hugh Shiplett

University of British Columbia (UBC) - Vancouver School of Economics ( email )

997-1873 East Mall
Vancouver, V6T 1Z1
Canada

Victoria Udalova

University of Wisconsin - Madison - Department of Economics ( email )

1180 Observatory Drive
Madison, WI 53706
United States

Government of the United States of America - Bureau of the Census ( email )

4600 Silver Hill Road
Washington, DC 20233-9100
United States

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