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Doctors without borders: The returns to an occupational license for Soviet immigrant physicians in Israel
Kugler, Adriana; Sauer, Robert
Universitat Pompeu Fabra. Departament d'Economia i Empresa
Re-licensing requirements for professionals that move across borders arewidespread. In this paper, we measure the returns to an occupationallicense using novel data on Soviet trained physicians that immigrated toIsrael. An immigrant re-training assignment rule used by the IsraelMinistry of Health provides an exogenous source of variation inre-licensing outcomes. Instrumental variables and quantile treatmenteffects estimates of the returns to an occupational license indicate excesswages due to occupational entry restrictions and negative selectioninto licensing status. We develop a model of optimal license acquisitionwhich suggests that the wages of high-skilled immigrant physicians in thenonphysician sector outweigh the lower direct costs that these immigrantsface in acquiring a medical license. Licensing thus leads to lower averagequality of service. However, the positive earnings effect of entry restrictionsfar outweighs the lower practitioner quality earnings effect that licensinginduces.
15-09-2005
Labour, Public, Development and Health Economics
Statistics, Econometrics and Quantitative Methods
licensing
occupational mobility
regulation
information and product quality
immigration
regression dicontinuity design
quantile regression
quantile treatment effects
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