Ownership and Hospital Behaviour: Employment and Local Unemployment

Andrew Clark and Carine Milcent

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Abstract: In this paper, we address two issues: i) how hospital employment changes with local unemployment, according to the type of hospital ownership, and ii) whether this relationship changed after the implementation of a pro-competitive reform that made hospitals more similar. A 2006-2010 French panel of 1,695 hospitals over five waves allows us to consider within-hospital employment changes. We first find that higher local unemployment is associated with greater employment in State-owned hospitals, but not for any other hospital ownership type: French local authorities then seem to respond to depressed local labour markets by increasing employment in State-owned hospitals. After the full implementation of the pro-competitive reform hospital funding became based only on activity and no longer on some historical budget. Theoretically, the new reimbursement system should break the relationship between public-hospital employment and local unemployment. Our results reveal that the reform worked as expected in less-deprived areas: reducing employment and eliminating the correlation between local unemployment and State-owned hospital employment. However, in higher-unemployment areas, public-hospital employment remains 2 counter-cyclical. Poor local labour-market health then seems to trump financial incentives in determining employment in public hospitals.

Keywords: Hospitals; Management; Competition; Public Employment; Unemployment; France (search for similar items in EconPapers)
Date: 2018-02
New Economics Papers: this item is included in nep-eur and nep-hea
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Related works:
Journal Article: Ownership and hospital behaviour: Employment and local unemployment (2018)
Working Paper: Ownership and hospital behaviour: Employment and local unemployment (2018)
Working Paper: Ownership and hospital behaviour: Employment and local unemployment (2018)
Working Paper: Ownership and Hospital Behaviour: Employment and Local Unemployment (2018)
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