Working Paper: NBER ID: w9649
Authors: Sean Nicholson
Abstract: Non-primary care physicians earn considerably more than primary care physicians in the United States. I examine a number of explanations for the persistent high rates of return to medical specialization and conclude that barriers to entry may be creating an economic shortage of non-primary care physicians. I estimate that medical students would be willing to pay teaching hospitals to obtain residency positions in dermatology, general surgery, orthopedic surgery, and radiology rather than receiving the mean residents' salary of $34,000. In the simulation, the quantity of residents in these four specialties would increase by an estimated six to 30 percent, rates of return would fall substantially, and teaching hospitals would save an estimated $0.6 to $1.0 billion per year in labor costs.
Keywords: No keywords provided
JEL Codes: I11; J31; J44; J51
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Barriers to entry (D43) | economic shortages of non-primary care physicians (I11) |
| residency review committees (R50) | number of residency positions (I23) |
| Barriers to entry removal (L49) | supply of non-primary care physicians (I11) |
| supply of non-primary care physicians (I11) | rates of return to specialization (J24) |
| Barriers to entry removal (L49) | savings in labor costs for teaching hospitals (J32) |
| number of residency positions (I23) | rates of return to specialization (J24) |
| rates of return to specialization (J24) | economic conditions not clearing effectively (E66) |