Bhattacharya, Jayanta. 2005. “Specialty Selection and Lifetime Returns to Specialization Within Medicine.” Journal of Human Resources 40(1): 115-143.

In 1995, the average American surgeon earned over $269,000 while family practice doctors earned $131,200. Using data from the Survey of Young Physicians and the American Medical Association’s Socio-Economic Monitoring Survey, I find that only half of income differences between generalists and specialists can be explained by hours of work, residency training length, and observed and unobserved ability differences—the three competitive market explanations for differences in doctors’ incomes across specialties. The most likely explanation for the remaining income differences is differential entry barriers across specialties.

Jayanta Bhattacharya is an assistant professor of medicine, Center for Primary Care and Outcomes Research, Stanford University. He thanks the Agency for Health Care Policy Research, the Olin Foundation, and the Center for Economic Policy Research at Stanford University for their financial support. Seminar participants at Stanford, Princeton, the University of Chicago, SUNY Stony Brook, RAND, Carnegie Mellon University, and at the 11th Annual Health Economics meetings provided helpful comments and suggestions. He appreciates the close reading that Partha Deb, William Sanderson, Patricia Danzon, Neeraj Sood, Darius Lakdawalla, Dana Goldman, and William Vogt gave to earlier drafts of this paper. The author thanks Marty Gaynor and an anonymous referee for useful comments and great editorial advice. The editorial process in this case was much more useful than is usually the case. Finally, he thanks Tom MaCurdy, Mark McClellan, and John Pencavel, who were all exceptionally helpful and patient. He claims responsibility for the remaining errors. The data used in this article can be obtained beginning in 2005 through 2008 from Jayanta Bhattacharya, Center for Primary Care and Outcomes Research, Stanford University, 117 Encina Commons, Stanford, CA 94305-6019 <jay@stanford.edu>.