The Labor Market for Medical Interns in Sweden : A Case for the Existence of a Compensating Differential for Remoteness

Sammanfattning: By applying the theory of compensating differentials on a self-compiled data set on the 67 sites in Sweden that offer medical internships, I seek to identify the factors of an internship that determine its salary. Because prospective interns tend to queue for popular internships, I use an estimated equilibrium salary that incorporates the opportunity cost of delaying the internship. I find a significant independent correlation between the travel time to the nearest major city and salary that is suggestive of a compensating differential. The results imply that a larger salary differentiation can mitigate the widespread phenomena of maldistribution of physicians.