Doctors without Borders? Relicensing Requirements and Negative Selection in the Market for Physicians

Kugler, Adriana and Sauer, Robert (2005): Doctors without Borders? Relicensing Requirements and Negative Selection in the Market for Physicians. Published in: Journal of Labor Economics , Vol. 23, No. 3 (2005): pp. 437-465.

Abstract

Relicensing requirements for professionals who move across borders are widespread. In this article, we measure the effects of occupational licensing by exploiting an immigrant physician retraining assignment rule. Instrumental variables and quantile treatment effects estimates indicate large returns to acquiring an occupational license and negative selection into licensing status. We also develop a model of optimal license acquisition that, together with the empirical results, suggests that stricter relicensing requirements may lead not only to practitioner rents but also to lower average quality of service in the market for physicians.

• Item Type: MPRA Paper
• Language: English
• Keywords: Occupational Licensing, Immigration, Israel
• Subjects: J - Labor and Demographic Economics > J0 - General > J00 - General

References

Abadie, A., J. D. Angrist, and G. Imbens. 2002. Instrumental variables estimation of quantile treatment effects. Econometrica 70, no. 1:91–117.

Angrist, J. D. 2001. Estimation of limited dependent variable models with dummy endogenous regressors: Simple strategies for empirical practice. Journal of Business and Economic Statistics 19:1–16.

Angrist, J. D., and J. Guryan. 2003. Does teacher testing raise teacher quality? Evidence from teacher certification requirements. Working Paper no. 9545, National Bureau of Economic Research, Cambridge, MA.

Angrist, J. D., G. Imbens, and D. B. Rubin. 1996. Identification of causal effects using instrumental variables. Journal of the American Statistical Association 91:444–72.

Angrist, J. D., and A. Krueger. 1999. Empirical strategies in labor economics. In Handbook of labor economics, vol. 3, ed. O. Ashenfelter and D. Card. Amsterdam: North-Holland.

Card, David. 1999. The causal effect of schooling on earnings. In Handbook of labor economics, vol. 3A, ed. O. Ashenfelter and D. Card. Amsterdam: North-Holland.

Friedberg, R. M. 2000. You can’t take it with you? Immigration assimilation and the portability of human capital: Evidence from Israel. Journal of Labor Economics 18, no. 2 (April): 221–50.

Friedman, M., and S. Kuznets. 1945. Income from independent professional practice. New York: National Bureau of Economic Research.

Griliches, Z. 1977. Estimating the returns to schooling: Some econometric problems. Econometrica 45, no. 1:1–22.

Hahn, J., P. Todd, and W. van der Klaauw. 2001. Identification and estimation of treatment effects with a regression-discontinuity design. Econometrica 69, no. 1:201–9.

Heckman, J. J., R. J. LaLonde, and J. A. Smith. 1999. The economics and econometrics of active labor market programs. In Handbook of labor economics, vol. 3A, ed. O. Ashenfelter and D. Card. Amsterdam: NorthHolland.

Kleiner, M. 2000. Occupational licensing. Journal of Economics Perspectives 14, no. 4:189–202.

Kleiner, M., and R. T. Kudrle. 2000. Does regulation affect economic outcomes? The case of dentistry. Journal of Law and Economics 43: 547–82.

Muzondo, T. R., and B. Pazderka. 1980. Occupational licensing and professional incomes in Canada. Canadian Journal of Economics 13, no. 4:659–67.

Pashigian, B. P. 1980. Has occupational licensing reduced geographical mobility and raised earnings? In Occupational licensing and regulation, ed. S. Rottenberg. Washington, DC: American Enterprise Institute. Shapiro, C. 1986. Investment, moral hazard and occupational licensing. Review of Economic Studies 53, no. 5:843–62.

Stigler, G. J. 1971. The theory of economic regulation. Cheltenham: Elgar.

Weiss, Y., R. M. Sauer, and M. Gotlibovski. 2003. Immigration, search, and loss of skill. Journal of Labor Economics 21, no. 3 (July): 557–91.