The returns to medical school in a regulated labor
market: Evidence from admission lotteries
Bas van der Klaauw
We estimate the returns to medical school by exploiting that admittance to medical
school in the Netherlands is determined by a lottery. Using data from up to
21 years after the lottery, we find that doctors earn at least 20 percent more than
people who end up in their next-best occupation. Estimated earnings profiles suggest
that the life-time difference is even much larger: 21 years after the lottery
the earnings difference exceeds 60 percent. Only a small fraction of this difference
can be attributed to differences in working hours and human capital investments.
The returns do not vary with gender or ability, but are higher for the less motivated.
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Last updated: September 28, 2012.