Texas Gov. Rick Perry claims to have lured many doctors to Texas, some of the many jobs he claims to have created. (The media’s treatment of which we’ve touched on here.) At the same time, a friend on the board of a local community health center says they cannot find doctors to staff it—there is an insufficient supply at the wage they have always been paying. How can this be consistent with Perry’s claim?
One possibility is that the reduction in malpractice insurance costs raised the net wage in the private sector relative to the public sector. Even if Perry’s claim is correct, there may be more doctors than before, but relative supply may have shifted to the private sector, leading to a shortage in the public sector.