European University Institute
Via della Piazzuola 43, 50133
NBER Working Papers and Publications
|November 2008||On the Sorting of Physicians across Medical Occupations|
with Gerald R. Marschke: w14502
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 malpracti...