The effects of delayed remuneration on doctor labour supply: Evidence from the English NHS

Abstract

We examine the labour supply response of doctors in England to a reform to public sector pensions that increased the link between current labour supply and pension value. Exploiting the staggered rollout of the reform across narrowly defined birth cohorts, we find that mid-career doctors increased their labour supply to the public healthcare system by just under 4% four years after exposure. This was driven by increases on the extensive margin of working in the public healthcare system. Our results imply an extensive margin labour supply elasticity with respect to the link between current labour supply and pension value of 0.04. Taking into account current pay we estimate an extensive margin labour supply elasticity with respect to total remuneration of 0.29. This is similar to estimates of doctor labour elasticities with respect to pay in other contexts, and suggests that delayed remuneration can be an effective tool for hospital systems to affect mid-career doctor labour supply.