This paper estimates the labor supply functions for health care professionals in China using Census-based data in 2005. The rapid economic growth and population aging in China led to a substantial increase in the demand for health care services and the derived demand for health care professionals in recent years. However, the increase in the supply of doctors and nurses lags behind the growth in demand, raising the question of whether the excess demand should be met by expanding the health care manpower or by inducing the existing personnel to work more hours through wage increase. Our findings indicate that wage rate adjustment has a significant impact on the length of working time among the self-employed practitioners (with an estimated short-run elasticity of 0.575), while the labor supply of hospital employees is inelastic due to their fixed payment scheme. Instead, hours worked in the employee group are related to non-wage factors such as asset holdings and the hospital ownership type. An important policy implication of our study is that adjustments of labor compensation methods and hospital ownership structure are potentially effective approaches for coping with the excess demand for health care professionals and improving the quality of health care in China.
Purpose The purpose of this paper is to estimate the value of a statistical life (VSL) in China using the hedonic wage model, and to explore the regional difference in VSL within the country. #n#Design/methodology/approach - Using the hedonic wage regression, this paper estimates the compensating wage differential for incremental job mortality risk among Chinese workers. The implied VSL is derived for China and its different regions. The data is from the 2005 China inter-census population survey, consisting of 1.3 million urban and rural workers. The authors also made important improvement in the model specification to explicitly address the missing variable issue in the previous studies. #n#Findings - The paper results indicate that the industry mortality risk has a significant impact on the wage rate. The implied VSL is 1.81 million RMB, a value substantially higher than previous estimates. The results also suggest a sizable urban-rural difference, with the urban VSL being 4.3 times higher than the rural estimate. The strong urban-rural inequality of income could be attributed to the segregation between the urban and rural labor markets. Practical implications The paper findings indicate the importance of reforming the current workers' compensation standard and improving the institutional environment, as well as enhancing the labor protection in the rural labor market. #n#Originality/value - This paper is the first attempt to estimate the value of life in China using the census based data. The paper results contribute to the growing literature in obtaining comparable VSL estimates in the developing countries.