Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/35611
Authors: 
Courty, Pascal
Marschke, Gerald
Year of Publication: 
2008
Series/Report no.: 
IZA discussion papers 3862
Abstract: 
We model the sorting of medical students across medical occupations and identify a mechanism that explains the possibility of differential productivity across occupations. The model combines moral hazard and matching of physicians and occupations with pre-matching investments. In equilibrium assortative matching takes place; more able physicians join occupations less exposed to moral hazard risk, face more powerful performance incentives, and are more productive. Under-consumption of health services relative to the first best allocation increases with occupational (moral hazard) risk. Occupations with risk above a given threshold are not viable. The model offers an explanation for the persistence of distortions in the mix of health care services offered, the differential impact of malpractice risk across occupations, and the recent growth in medical specialization.
Subjects: 
Performance measurement
moral hazard
incentives
matching
pre-matching investment
career choice
medical specialization
JEL: 
D82
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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