The Relationship Between Market Forces and Gender Differences in Physician Pay

Using state variation in HMO enrollments, I study the impact of market competition on the physician gender gap. Census data show that a one-percentage point increase in HMO market share improves the relative earnings of female physicians by 1.6 %, reducing the gap by 20 % between 1979 and 1999. After HMOs declined, the gap widened significantly. No such relationship was found for placebo groups such as college graduates, advanced degree holders, or lawyers. Young Physicians Survey data reveals that HMOs increased the demand for female specialties and practice settings and reduced economic rents disproportionately captured by men.