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Dual Practice by Health Workers: Theory and Evidence from Indonesia

Paula González (), Gabriel Montes-Rojas () and Sarmistha Pal ()

No 17.12, Working Papers from Universidad Pablo de Olavide, Department of Economics

Abstract: Using a simple theoretical model we conjecture that dual practice may increase the number of patients seen but reduce hours spent at public facilities, if public physicians lack motivation and/or if their opportunity costs are very large. Using data from Indonesia, we then test these theoretical conjectures. Our identification strategy relies on a 1997 legislation necessitating health professionals to apply for license for private practice only after three years of graduation. Results using a difference-in-difference regression discontinuity design provides support to our conjectures, identifying the role of weak work discipline, lack of motivation and opportunity costs of public service provision.

Keywords: Dual practice of health professionals; Ministry of health regulation; Weak monitoring; Motivation; Opportunity costs of public service; Indonesia (search for similar items in EconPapers)
JEL-codes: I10 I18 J2 J44 J45 O1 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-sea
Date: 2017-10
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