What Factors Affect Doctors' Hours Decisions: Comparing Structural Discrete Choice and Reduced-Form Approaches

45 Pages Posted: 18 May 2015

See all articles by Guyonne R.J. Kalb

Guyonne R.J. Kalb

University of Melbourne - Melbourne Institute: Applied Economic & Social Research; ARC Centre of Excellence for Children and Families over the Life Course; IZA

Daniel Kuehnle

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg

Anthony Scott

University of Melbourne - Melbourne Institute: Applied Economic & Social Research

Terence Chai Cheng

University of Melbourne - Melbourne Institute of Applied Economics and Social Research

Sung-Hee Jeon

Statistics Canada

Abstract

Few papers examine the pecuniary and non-pecuniary determinants of doctors' labour supply despite substantial predicted shortages in many OECD countries. We contribute to the literature by applying both a structural discrete choice and a reduced-form approach. Using detailed survey data for Australian physicians, we examine how these different modelling approaches affect estimated wage elasticities at the intensive margin. We show that all modelling approaches predict small negative wage elasticities for male and female General Practitioners (GPs) and specialists. Our detailed subgroup analysis does not reveal particularly strong responses to wage increases by any specific group. We show that the translog and Box-Cox utility functions outperform the quadratic utility function. Exploiting the advantages of the structural discrete choice model, we examine short-term effects at the intensive margin by calculating labour supply changes in response to 5 and 10% wage increases. The results show that such wage increases substantially reduce the full-time equivalent supply of male GPs, and to a lesser extent of male specialists and female GPs, but not of female specialists.

Keywords: labour supply, discrete choice model, wage elasticity, health workforce, MABEL

JEL Classification: I11, J22, J44, J21

Suggested Citation

Kalb, Guyonne R.J. and Kuehnle, Daniel and Scott, Anthony and Cheng, Terence Chai and Jeon, Sung-Hee, What Factors Affect Doctors' Hours Decisions: Comparing Structural Discrete Choice and Reduced-Form Approaches. IZA Discussion Paper No. 9054, Available at SSRN: https://ssrn.com/abstract=2606907 or http://dx.doi.org/10.2139/ssrn.2606907

Guyonne R.J. Kalb (Contact Author)

University of Melbourne - Melbourne Institute: Applied Economic & Social Research ( email )

Level 5, FBE Building, 111 Barry Street
Parkville, Victoria 3010
Australia

ARC Centre of Excellence for Children and Families over the Life Course ( email )

185 Pelham Street
Carlton, 3053
Australia

IZA ( email )

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

Daniel Kuehnle

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg ( email )

Lehrstuhl f. Statistik und emp. Wirtschaftsforschu
Lange Gasse 20
Nürnberg, 90403
Germany
+49-911-5302-256 (Phone)

Anthony Scott

University of Melbourne - Melbourne Institute: Applied Economic & Social Research ( email )

Level 5, FBE Building, 111 Barry Street
Parkville, Victoria 3010
Australia

Terence Chai Cheng

University of Melbourne - Melbourne Institute of Applied Economics and Social Research ( email )

185 Pelham Street
Carlton, Victoria 3053
Australia

Sung-Hee Jeon

Statistics Canada ( email )

Ottawa, Ontario
Canada

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