Unveiling physicians’ choice of practice location: evidence from observed migration

Abstract

This paper exploits the revealed preferences of all generalist physicians graduated in Brazil between 2001 and 2013 to examine the factors influencing their decision of practice location after graduation. We estimate physicians’ locational preferences using a random coefficients discrete choice model. The model allows us to simulate the effects of policies that could be used to increase the fraction of physicians working in underserved areas. We find that wages, though relevant, are not the main factor behind physicians’ locational preferences. Health infrastructure, physicians’ place of birth and graduation are more important. Affirmative action policies such as quotas in medical schools for students born in poorer areas and the opening of medical schools in underserved areas would improve the geographic distribution of physicians at a lower cost than financial incentives.