Our Self-Imposed Doctor Shortage

There are some good reasons to think the much-hyped doctor shortage won’t come to pass, but insofar as this is something people are worried about, it would be very easy to fix it through free trade. Politicians and economists always tout free trade as a remedy to high prices in sectors of the US economy that employ  low-wage, low-status people, and they’re basically right about that. It totally works to lower prices. But what’s good for the goose is good for the gander, and  there’s no reason to think free trade wouldn’t also work for the medical and legal professions.

Here’s a hot new paper by Brendan Peterson, Sonal Pandya, and David Leblang exploring the idea that we could fix our doctor shortage by importing more doctors:

Skills are often occupation-specific, a fact missing from existing research on the political economy of immigration. Although analyses of survey data suggest broad support for skilled migration occupational licensing regulations persist as formidable barriers to skilled migrants’ labor market entry. Regulations ostensibly serve the public interest by certifying competence but are simultaneously rent-preserving entry barriers. We analyze both the sources of US states’ licensure requirements for international medical graduates (IMGs), and the effect of these regulations on migrant physicians’ choice of US state in which to work over the period 1973-2010. Analysis of original data shows that states with self-financing state medical licensing boards, which can more easily be captured by incumbent physicians, have more stringent IMG licensure requirements. Additionally, we find that states that require IMGs to complete longer periods of supervised training receive fewer migrants. Our empirical results are robust to controls for states’ physician labor market. This research identifies an overlooked dimension of international economic integration: implicit barriers to the cross-national mobility of human capital, and the public policy implications of such barriers.


  1. Jon you start out with a faulty premise – Democrat politicians do not tout free trade, they support restraint of trade.

    Democrat politicians keep Davis Bacon in place, which everyone knows inflates the cost of public projects by 35%-50%. Unions who are the sole beneficiaries of Davis Bacon (to the detriment of the taxpayer) then funnel hundreds of millions of that excess cash back to the same Democrat politicians.

    In Washington this is politics. In the real world, this is bribery.

    You’ve said often you want to cut how much doctors make. Is that because doctors don’t funnel hundreds of millions back to Democrat politicians like the unions do?

    Another question – why are you perfectly willing to waste billions on Davis Bacon but want to import doctors instead of supporting American citizens? Are you now a firm believer in outsourcing?

    • Jon Geeting says:

      Now that’s a faulty premise. Trade policy is the closest thing you’ll find to a consensus in American politics. Everybody knows how this works – representatives talk a protectionist game on trade when it disadvantages firms in their districts, but then we see almost unanimous votes for trade agreements. You see Charlie Dent railing against Latin American cement manufacturers, Barack Obama promising to renegotiate NAFTA, but then it goes nowhere. Everybody knows that’s just how politicians have to talk to pacify voters because the politics of trade are bad. But when it comes time to vote, everybody’s a free trader. Except when it comes to high status professions like doctors and lawyers who have the political clout to win protectionist policies from the state.

  2. The attached article contains so many straw men that an entire farmer’s field was laid bare. You are right to cast a skeptical eye.

    There’s a lot that needs to be looked at before we import physicians (a model that was applied in the UK). The Medical College people don’t seem to have an opinion about AMA-recommended medical school quotas, which limit the number of doctors produced each year. They DO, strangely enough, seem to want doctor pay to be higher (to “attract talent”) and medical school to continue to last long (and expensively). Following that out would lead to the same number of doctors at higher pay and more education, which doesn’t do much to solve the problem.

    PAs are as well trained in some areas as doctors were not too long ago. Properly supervised, PAs can give good primary care at much less educational cost and time, which means more productivity. “Doctors” should focus on higher-end medicine and specialty care–no one is looking to outsource neurosurgery.

    Some years ago in Boston a national drug chain wanted to have LPNs on duty to do basic medical checks and simple medicine dispensing (well within their competence) at very low rates for lower income folks. Naturally the government and the doctors squawked that plan, though offered little to replace it. Ironically, that’s probably the kind of care they’ll end up getting.

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