Wages and work conditions as determinants for physicians’ work decisions

It is not uncommon that publicly employed physicians also have income from work outside the hospital, sometimes termed moonlighting. There is little empirical evidence of such activity. In this article, we investigate which factors that may influence physicians’ choice of work between the public hospital sector and elsewhere. An exceptionally high wage increase in 1996 for one group of hospital physicians (physician assistants) serves as a natural experiment, and we analyse whether wages in general and this reform in particular have affected physicians’ external earnings. For physician assistants we find that higher wages at public hospitals affect negatively both the decisions to earn income externally, and level of income once active. For chief physicians, on the other hand, there was no such response to the wage increase. Several hospital specific factors representing job specific work characteristics also matter for physicians’ decisions to earn income externally.