Do medical doctors respond to economic incentives?

Link to article:



Andreassen, Leif, Maria Laura Di Tommaso and Steinar Strøm




Journal of Health Economics

Vol 32, 392-409


A longitudinal analysis of married physicians labor supply is carried out on Norwegian data from 1997 to 1999. The model utilized for estimation implies that physicians can choose among 10 different job packages which are a combination of part time/full time, hospital/primary care, private/public sector, and not working. Their current choice is influenced by past available options due to a habit persistence parameter in the utility function. In the estimation we take into account the budget constraint, including all features of the tax system. Our results imply that an overall wage increase or less progressive taxation moves married physicians toward full time job packages, in particular to full time jobs in the private sector. But the overall and aggregate labor supply elasticities in the population of employed doctors are rather low compared to previous estimates.


J22, I10, C35


Physicians’ labor supply, Multi-sector, Panel data


Oppdragsgiver: NFR via OFS
Oppdragsgivers prosjektnr.: 219616
Frisch prosjekt: 1149 - Oslo Fiscal Studies - a Centre for Public Economics