THE DEMAND FOR MEDICAL-EDUCATION - AN AUGMENTED HUMAN-CAPITAL APPROACH

The demand for education is often viewed as a pure human capital good and hence treated like an investment. Medical education, like other ty pes of education, should also have some consumption value. However, be cause of the high pecuniary returns to medical education, this particu lar type of schooling is often viewed by the public purely as an inves tment. An alternative (consumption) view focuses on medicine as a voca tion in which a certain percentage of the population will answer the c alling to practice medicine, possibly deciding to practice independent of income considerations. The current paper examines the investment a nd consumption features of the demand for medical education, using med ical application data over the 1948 to 1994 time period. A variant of a pure human capital (investment) model, and a model augmented by cons umption and demographic variables, are set forth and examined using me dical education data. We find that, when predicting demand into the 19 90's, a basic, static human capital model best forecasts applicant act ivity. [JEL I11] (C) 1998 Elsevier Science Ltd. All rights reserved.