HOW MUCH SHOULD DOCTORS BE PAID? CROSS-CULTURAL EVIDENCE OF PREFERENCES FOR PAY RATIOS

Tuesday, January 7, 2014
Poster Board # P2-1

Sorapop Kiatpongsan, MD, Harvard Interfaculty Initiative in Health Policy, Cambridge, MA and Michael I. Norton, PhD, Harvard Business School, Boston, MA

Purpose:

To assess the estimated (perceived) and ideal (preferred) incomes of doctors, executive officers, cabinet ministers and unskilled workers in Asia, Australia, Africa, Europe, and America and examine whether ideal income gaps between skilled and unskilled workers were smaller than estimated gaps.

Methods:

Data were from the latest International Social Survey Programme published in 2012 (conducted in 2009). Respondents from 40 countries (N = 55,238) across five continents were asked to estimate how much a general practitioner (GP), a chairman of a large corporation (CEO), a cabinet minister, and an unskilled worker earn. Then, they reported how much these people should earn. Ratios of incomes were calculated using the income of an unskilled worker as the denominator. Ratios of estimated incomes were compared to ratios of ideal incomes.

Results:

Median ratios of estimated incomes of GPs to unskilled workers ranged from 1.25 (in Ukraine) to 12.00 (in South Africa). Median ratios of estimated incomes of CEOs to unskilled workers ranged from 3.85 (in Denmark) to 41.67 (in South Korea). Median ratios of estimated incomes of ministers to unskilled workers ranged from 2.50 (in Norway) to 25.71 (in South Africa).

Median ratios of ideal incomes of GPs to unskilled workers ranged from 1.50 (in Ukraine and China) to 8.28 (in South Africa). Median ratios of ideal incomes of CEOs to unskilled workers ranged from 2 (in Denmark) to 20 (in Taiwan). Median ratios of ideal incomes of ministers to unskilled workers ranged from 2 (in Norway) to 10 (in South Africa).

Most importantly, the median ratio of ideal incomes (GPs' to workers') was significantly lower than the median ratio of estimated incomes in 35 of the 40 countries (p < 0.05) excepting only Argentina, Estonia, Russia, Ukraine and Venezuela. Similarly, median ratios of ideal incomes (both CEOs' to workers' and ministers' to workers') were significantly lower than median ratios of estimated incomes in all 40 countries (p < 0.05 for all).

Conclusions:

There is an international consensus that the ideal gaps in incomes between CEOs/ministers and workers should be smaller. In the vast majority of countries, people believed that the gap in income between doctors and workers should also be smaller.