ABSTRACT
This chapter addresses labour issues that range from general supply and demand principles applied to all health care occupations, to specialized topics involving shortages of doctors and registered nurses, medical education and licensure, and various practice decisions of physicians. We use the term labor here in the general economic sense of an input in production that is distinct from capital and that is provided by human beings. The chapter discusses the numerous studies which have attempted to estimate the rate of return to a medical education. The chapter uses basic economic tools to provide important insights into a variety of health care labor issues, including the demand and supply of labor, optimal input decisions and factor substitution and labor shortages. The chapter examines two earnings issues as they related to specialization and the gender gap. The adoption of pay-for-performance and growth of consumer-driven health plans are other recent innovations that may have major effects on health care delivery.
