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Amenities and wage premiums: the role of services.

ABSTRACT: This paper studies amenities and wage premiums in a service economy where individuals with different skills choose cities with different amenities and choose occupations to produce different services, namely the high-quality service or the low-quality service. Workers with higher skills have stronger preferences for amenity and choose the high-amenity city. Within each city, workers with higher skills choose to produce the high-quality service, and workers with lower skills choose to produce the other. Workers with higher skills are willing to sacrifice more wages to live in the high-amenity city. As a result, the price of the high-quality service, relative to the price of the low-quality service, is lower in the high-amenity city, because the wage equals the price times skill or productivity. The wage of a worker with a given skill in the high-quality service sector, relative to the wage of a worker in the low-quality service sector, or the wage premium, is thus lower in the high-amenity city. A quantitative analysis shows that the wage premium is about 3% lower when amenity is 10% higher. However, the average wage of high-quality service workers over that of low-quality service workers may be lower or higher in the high-amenity city due to skill concentration in the high-amenity city.

Supplementary information

The online version contains supplementary material available at 10.1007/s00168-022-01188-w.

SUBMITTER: Lee K

PROVIDER: S-EPMC9660164 | biostudies-literature | 2022 Nov

REPOSITORIES: biostudies-literature

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Amenities and wage premiums: the role of services.

Lee Kangoh K Tse Chung-Yi CY

The Annals of regional science 20221113

This paper studies amenities and wage premiums in a service economy where individuals with different skills choose cities with different amenities and choose occupations to produce different services, namely the high-quality service or the low-quality service. Workers with higher skills have stronger preferences for amenity and choose the high-amenity city. Within each city, workers with higher skills choose to produce the high-quality service, and workers with lower skills choose to produce the ...[more]

PMID: 36407684

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Project description:Whenever people act, mistakes are made. In Germany, it is thought that a total of 40 000 cases of malpractice occur per year. In recent years, costs for liability insurance have risen significantly in almost all spheres of medicine as a whole. Liability in the health care sector is founded on the contractual relationship between doctor and patient. Most recently, case law developed over many years has been codified with the Patients' Rights Act. In obstetrics, the focus of liability law is on brain damage caused by hypoxia or ischemia as a result of management errors during birth. The costs per claim are made up of various components together with different shares of damage costs (increased needs, in particular therapy costs and nursing fees, acquisition damage, treatment costs, compensation). In obstetrics in particular, recent focus has been on massively increased liability payments, also accompanied by higher liability premiums. This causes considerable financial burdens on hospitals as well as on midwives and attending physicians. The premiums are so high, especially for midwives and attending physicians, that professional practice becomes uneconomical in some cases. In recent years, these circumstances have also been intensely debated in the public sphere and in politics. However, the focus here is on the occupation of midwife. In 2014, in the GKV-FQWG (Statutory Health Insurance - Quality and Further Development Act), a subsidy towards the occupational liability premium was defined for midwives who only attended a few deliveries. However, to date, a complete solution to the problem has not been found. A birth will never be a fully controllable risk, but in rare cases will always end with injury to the child. The goal must be to minimise this risk, through good education and continuous training, as well as constant critical analysis of one's own activities. Furthermore, it seems sensible, especially in non-clinical Obstetrics, to look at the current study data more closely. Among the many solutions which have been proposed, such as the development of quality management, risk management and prevention, better remuneration, a waiver on recourse claims by social insurance underwriters, a cap on damage costs of liability insurers, state liability, an indemnity fund, a system change to Medical Treatment Risk Insurance, as well as a discussion on whether or not it makes sense to use non-clinical obstetrics for the prevention of a further increase in premiums, not one stands out as being especially convincing. On the contrary, a meaningful coordination of various concepts should follow. What seems sensible is a higher remuneration per birth, taking into account the liability premiums as well as, in the medium term, the establishment of a liability fund which, from a certain limit upwards, steps in as liable third party.

Dataset Information

Amenities and wage premiums: the role of services.

Supplementary information

Publications

Amenities and wage premiums: the role of services.

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