What factors affect physicians' labour supply: Comparing structural discrete choice and reduced‐form approaches

Abstract

Little is known about the response of physicians to changes in compensation: Do increases in compensation increase or decrease labour supply? In this paper, we estimate wage elasticities for physicians. We apply both a structural discrete choice approach and a reduced-form approach to examine how these different approaches affect wage elasticities at the intensive margin. Using uniquely rich data collected from a large sample of general practitioners (GPs) and specialists in Australia, we estimate 3 alternative utility specifications (quadratic, translog, and box-cox utility functions) in the structural approach, as well as a reduced-form specification, separately for men and women. Australian data is particularly suited for this analysis due to a lack of regulation of physicians' fees leading to variation in earnings. All models predict small negative wage elasticities for male and female GPs and specialists passing several sensitivity checks. For this high-income and long-working-hours population, the translog and box-cox utility functions outperform the quadratic utility function. Simulating the effects of 5% and 10% wage increases at the intensive margin slightly reduces the full-time equivalent supply of male GPs, and to a lesser extent of male specialists and female GPs.

Labour supply, service intensity, and contracts: Theory and evidence on physicians

“…Physicians can affect their output at work through two basic margins (see McGuire, 2000): their hours spent seeing patients and their volume of services provided per hour (or service intensity). Yet, empirical studies of physicians' labour supply typically concentrate on either hours of work (Andreassen et al, 2013; Baltagi et al, 2005; Kalb et al, 2018; Showalter & Thurston, 1997) or the volume of services (Clemens & Gottlieb, 2014; Devlin & Sarma, 2008; Kantarevic et al, 2008). Generalized models, which simultaneously analyse decisions over hours and service intensity, permit a more complete portrait of physician behaviour and allow for a richer policy evaluation environment.…”

Responsive policies needed to secure rural supply from increasing female doctors: A perspective

“…Having young dependent children reduces the total hours worked by female general practitioners (GPs) and specialists, but not males. 24 , 25 This decrease is largest for female GPs (who may work nearly 12 h less per week if they have children aged 0–4 years). 25 This does not rebound to the same lifetime hours as men.…”

“… 24 , 25 This decrease is largest for female GPs (who may work nearly 12 h less per week if they have children aged 0–4 years). 25 This does not rebound to the same lifetime hours as men. UK data suggests female doctors provide 25% less lifetime hours of employee contribution than male doctors.…”

Labour Market Participation: Family and Work Challenges across the Life Course

“…Although the impacts are smaller than for lowereducated mothers, even when the mother is highly educated, the presence of young children affects her labour supply much more than for similar fathers. An analysis of general practitioners' and medical specialists' labour supply shows that female medical doctors (general practitioners and specialists) reduce their labour supply substantially when preschool children are present, while male specialists are not affected at all and male general practitioners are affected to a much smaller extent and only for preschool children (Kalb et al, 2018). Female general practitioners, on the other hand, reduce labour supply at least to some extent when any child under age 15 is present.…”