Sharing the Burden: The Impacts of Pharmacy Sector Reforms on the Labor Market for Pharmacists in Portugal

David Card (), Ana Rute Cardoso and Pedro Luis Silva ()
Additional contact information
David Card: Department of Economics, University of California-Berkeley; NBER & IZA@LISER Network.

Working Papers from Department of Applied Economics at Universitat Autonoma of Barcelona

Abstract: In the depths of the 2010 financial crisis the Portuguese government enacted a series of reforms in its prescription drug reimbursement system. Over the next three years value added per pharmacist in retail pharmacies fell by a third, reflecting a rise in generic substitution and reductions in the markups allowed for prescription drugs. This massive shock led to pay cuts for incumbent pharmacists and the introduction of a two-tier pay system for new hires, with little or no reduction in the growth of employment. We use detailed longitudinal records from the Quadros de Pessoal data base, merged with information on collective bargaining settlements and firm financial records, to study the impacts of the reforms. We estimate that between 2009 and 2022 average wages of pharmacists fell by a third; most of this reduction was due to lower wages for newly entering cohorts. The implied responsiveness of wages to productivity is substantially above most estimates in the rent-sharing literature, arguably reflecting the strong attachment of workers to the sector and the steady inflow of newly graduating pharmacists. Stepping back, we then consider how wages of pharmacists have div erged relative to wages of other health care professionals in Portugal, and the decisions of recent college applicants to enter the profession.

Keywords: Retail pharmacy; Two-tier wage contracts; Product market deregulation; Rent sharing. (search for similar items in EconPapers)
Pages: 55 pages
Date: 2026-08
References: Add references at CitEc
Citations:

Downloads: (external link)
https://ddd.uab.cat/repec/doc/wpdea2607.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:uab:wprdea:wpdea2607

Access Statistics for this paper

More papers in Working Papers from Department of Applied Economics at Universitat Autonoma of Barcelona Contact information at EDIRC.
Bibliographic data for series maintained by Dept. Economia Aplicada ().