Get paid more, work more? Lessons from French physicians' labour supply responses to hypothetic fee increases

Abstract

This paper is devoted to the analysis of the General Practitioners' (GPs) labour supply, specifically focusing on the physicians' labour supply responses to higher compensations. This analysis is mainly aimed at challenging the reality of a ‘backward bending' form for the labour supply of GPs. Because GPs' fees only evolve very slowly and are mainly fixed by the National Health Insurance Fund, we designed a contingent valuation survey in which hypothetical fee increases are randomly submitted to GPs. Empirical evidence from 1,400 French GPs supports the hypothesis of a negative slope for the GPs' labour supply curve. Therefore, increasing the supply of physicians' services through an increase in fees is not a feasible policy.General practitioners; contingent valuation; price of leisure; labour supply; backward bending curve