Abstract
We exploit lottery-determined admission to dental school to estimate the payoffs to the study of dentistry in the Netherlands. Using data from up to 22 years after the lottery, we find that in most years after graduation dentists earn around 50,000 Euros more than they would earn in their next-best profession. The payoff is larger for men than for women but does not vary with high school GPA. The large payoffs cannot be attributed to longer working hours, larger investments while studying (opportunity costs and direct costs), or unpleasant aspects of working as a dentist. A plausible explanation is that dentists earn a monopoly rent. Results from regressions of dentists’ earnings on dentists density are consistent with this, as are the facts that the supply of dentists in the Netherlands is low and that the payoff does not vary with high school GPA.
| Original language | English |
|---|---|
| Pages (from-to) | 145-158 |
| Number of pages | 14 |
| Journal | Journal of Health Economics |
| Volume | 63 |
| Early online date | 17 Nov 2018 |
| DOIs | |
| Publication status | Published - Jan 2019 |
Funding
We gratefully acknowledge helpful comments from two anonymous referees and from the editor (Owen O’Donnell). The non-public micro data used in this paper are available via remote access to the Microdata services of Statistics Netherlands (CBS). Van der Klaauw acknowledges financial support from Vici-grant from the Dutch Science Foundation (NWO). Declarations of interest: none.
| Funders | Funder number |
|---|---|
| Nederlandse Organisatie voor Wetenschappelijk Onderzoek |
Keywords
- Admission lotteries
- Dentists
- Medical labor markets
- Monopoly rents
- Occupational licensing
