Economic Intelligence Briefs

Fee-for-Service vs. Salaried Doctors

Some critics of the existing physician fee-for-service system suggest a move to salaried employment of Canadian physicians. Evidence from an extensive survey implies that “salaried doctors organized into large groups will choose to reduce both their patient contact hours and total hours worked." Thus, fee-for-service physicians see patients 5.9 hours each week more than physicians who are salaried.

The authors conclude that any move to salaried employment “should take into account potentially large changes in the amount of services supplied per physician."

Source: Christopher Ferral, Allan Gregory and William Tholl, “Endogenous Work Hours and Practice Patterns of Canadian Physicians,” Canadian Journal of Economics, February 1998.

Success of Canadian Charter Schools

Charter schools operating in Alberta since 1994 have been declared a success by parents and teachers.

Parents viewed the charter superior to their child’s previous school, noting “the learning of basic skills, academic standards and the quality of teaching," as the schools’ most important achievements. Their children’s “academic performance, satisfaction with learning and personal confidence" improved since attending the charter school.

Charter-school teachers praise highly their schools’ provision of an alternative education, higher student achievement, success with teaching hard-to-educate students, and offering a disciplined and orderly educational environment.

Source: Dr. Beverly Lynn Bosetti, Canada’s Charter Schools: Initial Report, Society for the Advancement of Excellence in Education, October 1998. (Submitted by Claudia Rebanks Hepburn, Fraser Institute).

More “employable” people on welfare

A data set provided by the administrative office of the welfare system in British Columbia revealed that individuals deemed “employable” rose from 38 percent of welfare case loads in 1980-82 to 64 percent in 1991-92. The percentage of welfare recipients who are single males has risen from 34 to 44 percent during that same time period.

“A quarter of welfare recipients are back on the welfare rolls within three months of leaving, while a full 50 percent return within a year... Single individuals without children ... display a seasonal pattern in their use of welfare."

In 1991-92 less than a quarter of welfare cases were single mothers. They are very likely to use welfare intermittently over long periods of time.

Source: Array Barrett and Michael Cragg, “An Untold Story: The Characteristics of Welfare Use in British Columbia” Canadian Journal of Economics, February 1998.

Crime and Punishment

If sentencing for auto-theft is made more severe and thereafter fewer cars are stolen, is that because thieves are deterred or because they are in jail and cannot steal? Yes: “deterrence is more important than incapacitation, particularly for property crime.” This conclusion is based on an empirical study which found that other types of theft, like burglary, increased after an increase in the expected punishment for auto-theft. This must be because potential auto thieves were deterred, and shifted into burglary.

Relatedly, over the last two decades juvenile crime in the US has risen much faster than adult crime. During the same time the adult prison population has risen greatly while that of juveniles has not. About 60 percent of the greater increase in juvenile crime is estimated to be due to the relatively less severe punishment of juveniles. When juveniles become old enough to be tried in adult court, they reduce their criminal behaviour sharply. Deterrence also explains this change in behaviour.

Source: Stephen Levitt, “The Economics of Crime and the Criminal Justice System,” NBER Reporter, Fall 1998.

“Economic Intelligence Briefs” is researched and edited by Herbert Grubel, David Somerville Chair in Taxation and Finance at The Fraser Institute, who invites readers to send contributions to Fraser Forum or herbg@fraserinstitute.ca.