Panel Paper:
The Determinants of Physicians’ Location Choice: Understanding the Rural Shortage
Friday, July 24, 2020
Webinar Room 6 (Online Zoom Webinar)
*Names in bold indicate Presenter
A long-standing challenge in the US health care system is the provision of medical services to rural areas. This paper develops a structural spatial equilibrium model of location choice with heterogeneous physicians and uses it to explore the impact of policies on the geographical distribution of physicians. I allow for physicians’ preference to remain close to their residency location. I collect micro data from physicians’ directories on their medical school, residency, and first-job choices and use this new dataset to implement an instrumental variable approach to overcome endogeneity issues caused by the correlation between wages and unobserved amenities. I find that residents strongly prefer remaining close to their residency location. Current policies have led to 1.2% more physicians choosing rural areas. Switching the current policy focus toward higher salary incentives would lead to 6 times more primary care physicians choosing rural areas and a higher average quality of rural physicians.
Full Paper:
