The Migration of Highly-Skilled Workers: The Case of Physicians
- Presenter:
Chair: Didem Bernard; Discussant: Jim Walker Mon June 5, 2006 17:15-18:45 Room 313
The international migration of medical professionals has garnered much media attention of late in many countries. Although many reports have been alarming, a casual look at the data suggests that the brain drain may not be an important issue, as only a small proportion of physicians migrate internationally each year. Governments have, nevertheless, been preoccupied by issues of migration. This is because, from a public-policy perspective, it is not only the number of individuals who migrate that is of interest, but also who in particular migrates (and, in the case of intra-country migration, where they migrate to). If those who migrate are the relatively high-skilled or productive, then simply looking at net migration to determine the impact of migration may be misleading.
The goals of this paper are threefold. First, we wish to contribute to the general literature on the fundamental drivers of international and interprovincial mobility of highly-skilled workers. Second, we wish to uncover the link between observable and unobservable skills and the propensity to migrate. Finally, we wish to contribute to the recent empirical literature on the Borjas (1987) hypothesis, which posits that individuals sort according to skill levels and regional returns to these skills, by considering not only observable skills (as in the previous literature) but also unobservable skills (which has not, to our knowledge, been considered before).
In order to do so, we focus on the migration patterns of Canadian physicians (using a 10 year panel). We choose this particular group for several reasons. First, physicians (especially specialists) are often singled out, in Canada, as a highly-educated group who frequently experience both international and interprovincial migration. Furthermore, focusing on physicians allows us to study the migration decisions of a relatively homogenous set of workers in terms of formal education. Finally, Canadian physicians are generally paid on a fee-for-service (i.e., a fee-per-consultation) basis. Thus, wage rates (or fees) can be considered exogenous to both observable and unobservable individual characteristics as they reflect exclusively the physician’s specialty and province of practice. Consequently, we can use the physician’s total billings as a measure of his or her output and offer a precise definition of a highly-skilled physician: a physician who has greater billings (i.e., has a greater output of health-care services) than would otherwise be predicted by their observable characteristics and the exogenous wage-rate they face.
We first estimate a model which allow us to uncover whether or not individuals who earn more than would otherwise be predicted by their observable characteristics (i.e., are highly-skilled according to our definition) are also those who are more likely to migrate. We then turn to the impact of destination-specific characteristics (particularly earning differentials) on the choice of physician location. Finally, we examine whether differences in the returns to observed human capital and unobserved skills across different province are an important factor in physician mobility.
