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Home Publications Blogs Beat the Press If Trade Economists Were More Honest the NYT Would Not Print Articles About the U.S. Stealing Doctors from Poor Countries

If Trade Economists Were More Honest the NYT Would Not Print Articles About the U.S. Stealing Doctors from Poor Countries

Sunday, 11 March 2012 10:11

The United States buys food from many developing countries. How many major NYT pieces have there been complaining about how we steal food from Honduras, Ghana or other poor countries?

Of course that would make no sense. In principle the trade should be mutually beneficial, with poor countries using the money they get from exporting food to buy necessary imports. (Not everyone necessarily gains in this story. For example, the landowners may be positioned to get the bulk of the benefits, but the poor country as a whole generally gains from trade.)

This fact makes it very strange that the NYT would run a major Sunday Magazine piece titled, "America is stealing the world's doctors." The same models that economists use all the time to tout the benefits of trade and show the stupidity of trade barriers can also be used to show how poor countries can benefit from having their doctors come to the United States.

Doctors are not in fixed supply, we can have more of them. And in fact, it is much cheaper to train doctors in the developing world than in the United States. Rather than having fewer doctors come from the developing world, the economics would dictate that we should have more.

Doctors earn on average more than $250,000 a year in the United States. The piece describes an American trained doctor in Zambia earning just $24,000 a year. This suggests enormous opportunities for potential gains.

If many more doctors went from Zambia and other poor countries to work in the United States, it could substantially reduce the pay of doctors in the United States. If enough doctors came to the United States to reduce average pay by $100,000 a year, the savings to patients would be more than $80 billion a year.

If just 20 percent of these gains were taxed back to pay for extending medical training in the developing world ($16 billion a year), the doctors who left could be more than replaced with newly trained physicians. This would mean that developing countries would also be able to get better health care. And, the net savings to the United States would still be well over $60 billion a year, far more than the amount of money at stake with extending the Bush tax cuts to the richest 2 percent.

This is how any honest trade economist would view this situation. Unfortunately, trade economists spend most of their time arguing against measures that could benefit manufacturing workers and other less-educated workers. They don't concern themselves with the far more costly barriers than ensure that doctors in the United States stay rich and that health care remains unaffordable to many both in the United States and the developing world.

Comments (13)Add Comment
Doctors limited supply on purpose
written by jumpinjezebel, March 11, 2012 11:49
My collece thesis proved that the Medical Schools are purposely constraining the number of doctors in medical schools to keep their pay high. Still happening.
written by R..M. Flanagan, March 11, 2012 3:16
In his 1963 paper on the economics of US health care Kenneth Arrow made a closely allied point:that US health care costs could be reduced by educating more doctors whichcould be done without lowering the average skill level by permitting the entry of foreign students better qualified than the US candidates who would otherwise gain entrance under lower admission standards.
written by John Q, March 11, 2012 7:36
"If just 20 percent of these gains were taxed back to pay for extending medical training in the developing world ($16 billion a year)"

Yes, but right now we are NOT paying the $16 billion a year abroad for medical training. So until that happens, we are indeed "stealing", wouldn't you say?

Nurse practitioners
written by Jennifer, March 11, 2012 8:13
Or you could increase primary care access to nurse practioners who work for much less and could fill a pressing need NOW. There could also be some aggressive tuition reform at universities and medical schools which would benefit many people. There also needs to be a revamping of the fee for service model and a requirement that MDs work for hospitals- which is associated with lower costs and better health outcomes. For somebody who complains about bloated health costs so often do you think you could bring up ANY other issue that could actually be implemented?
written by Luke Lea, March 11, 2012 9:27
This is an idee fixe of yours. Suppose high IQ's are in short supply in certain parts of the world. Would you still favor this?
Thanks for sticking to this issue!
written by Kevin Egan, March 11, 2012 10:38
Thanks for this great, clear, honest explanation!

And to Luke Lea, high IQs are very evenly distributed everywhere in the world--though lately in the U.S., you wouldn't know it!
More clarity please
written by matthew, March 12, 2012 1:11
If anyone wishes to comment on the following, it might help clarify this somewhat opaque discussion.

1. Isn't the trend of putting U.S. workers in competition with workers in developing countries hurting U.S. workers? If this trend is hurting non-professional, low-wage workers, why would we want to extend it to high-wage workers?

2. Is the logical conclusion of Dean's argument that there should be no restrictions whatsoever on immigration? (Should we have "free trade" in workers?)

Impact of Trade in Highly Paid Professionals
written by dean, March 12, 2012 3:35
The reduction in wages of manufacturing workers help higher paid workers. It reduces the prices of manufacturing goods, effectively raising the real wages of those who are not directly subject to this competition. If doctors wages fall, health care costs fall. This raises the real wages of non-doctors.

The right understands this fact. Progressives will get killed until they figure this out.

You can argue what you want about immigration restrictions, but we can hugely change the market for professionals by just replacing some of the immigrants who come here to work as custodians and dishwashers with doctors and lawyers.
written by john, March 12, 2012 7:28
I did not realize the concept of free trade applied to labor. Why stop with doctors. Why not import teachers, cops, and firefighters. I am sure that same doctor in Zambia would jump at the chance to join the LA County fire dept. at an average wage of 120K per year and then retire at age 50 with 90% of his final pay and lifetime medical benefits. In fact, if he is smart as you say he is he would be wise to forgo the medical job and take the much easier and shorter fireman career.

Our public school teachers are by and large our less qualified graduates of our universities. I say we scour Africa and Asia for their top graduates. Just think how much better our teachers will be....and we could pay them a third of what we pay now. Our teachers make 10x what the average teacher in Nigeria makes. Just think of the savings.
written by ronald, March 13, 2012 10:50
Surely, you realize countries like Honduras import more food from the US than they export, at least post CAFTA.
That aside, here's a major NYTimes Magazine story on agro-imperialism, or as "stealing food," as you called it: http://www.nytimes.com/2009/11...wanted=all
quarter billion with health insurance
written by subsci, March 14, 2012 5:02
says 1/4 billion in US in 2010 with health insurance. Then $80 billion (savings if M.D. salary reduced) is not a very big per insured savings.
url for previous
written by subsci, March 14, 2012 5:43
Zambia is corrupt
written by Carol, March 15, 2012 3:45
Google Zambia + corruption. You think Zambians don't bribe their way through school? Use connections and money to get into school and get good grades?
Do you know anyone who went to Zambia for their education?
Even if education was a bright spot in Zambia, it is unfair to all the young Americans who are very bright and kept out of Med school here to hand over good-paying medical jobs to Zambians.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.