Throughout most of the 1970s, federal health manpower policy assumed that physicians would not move into smaller towns as their numbers increased. In this report, the authors show that a number of predictions of standard location theory are consistent with the data on physician location. Empirically, they show that, controlling for (self-designated) specialty, physicians have moved into previously unserved towns as their numbers have increased. Contrary to conventional wisdom, physicians in cities of one million or more earn less per hour in real terms than do their colleagues in smaller cities and towns, although the difference is not great. The authors suggest that the premise underlying the notion of designating medically underserved areas — that physicians will not go to certain areas where they are in demand — is in error.
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