Physicians' Occupational Licensing and the Quantity-Quality Trade-off

Juan Pablo Atal, Tomás Larroucau, Pablo Muñoz and Cristóbal Otero ()

No 35855, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Occupational licensing is a widespread quality regulation that potentially increases the quality of labor but reduces its quantity. We provide a theoretical framework to empirically quantify this trade-off in public hospitals, where both clinical quality and physician shortages are critical concerns. Using quasi-exogenous variation driven by a recent and unprecedented migration of physicians to Chile, together with growth in domestic medical schools, we show that more physicians improve patient outcomes, while lower-quality physicians—as measured by licensing exam performance—worsen them. Incorporating these findings into our theoretical framework, we evaluate the implications of locally changing the stringency of the licensing policy.

JEL-codes: I18 J24 J44 J45 (search for similar items in EconPapers)
Date: 2026-10
Note: EH
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Working Paper: Physicians' Occupational Licensing and the Quantity-Quality Trade-Off (2025)
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