Measuring Physicians' Response to Incentives: Evidence on Hours Worked and Multitasking

Bruce S. Shearer (), Nibene Habib Somé () and Bernard Fortin ()
Additional contact information
Bruce S. Shearer: Université Laval
Nibene Habib Somé: University of Western Ontario

No 11565, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We measure the response of physicians to monetary incentives using matched administrative and time-use data on specialists from Québec (Canada). These physicians were paid fee-for-service contracts and supplied a number of different services. Our sample covers a period during which the Québec government changed the prices paid for clinical services. We apply these data to a multitasking model of physician labour supply, measuring two distinct responses. The first is the labour-supply response of physicians to broad-based fee increases. The second is the response to changes in the relative prices of individual services. Our results confirm that physicians respond to incentives in predictable ways. The own-price substitution effects of a relative price change are both economically and statistically significant. Income effects are present, but are overridden when prices are increased for individual services. They are more prominent in the presence of broad-based fee increases. In such cases, the income effect empirically dominates the substitution effect, which leads physicians to reduce their supply of clinical services.

Keywords: physician labour supply; multitasking; incentive pay (search for similar items in EconPapers)
JEL-codes: I10 J22 J33 J44 (search for similar items in EconPapers)
Pages: 53 pages
Date: 2018-05
New Economics Papers: this item is included in nep-hea and nep-lma
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Citations: View citations in EconPapers (3)

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Related works:
Working Paper: Measuring Physicians’ Response to Incentives: Evidence on Hours Worked and Multitasking (2018)
Working Paper: Measuring Physicians’ Response to Incentives: Evidence on Hours Worked and Multitasking (2018)
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