The Impact of the Labor Market on the Medical School Applicant Pool

hc finance-01

By: Timothy M. Dall, managing director, IHS Life Sciences

In their recent article, Cort and Morrison highlight that general economic conditions can influence career decisions. Their research found a strong correlation between macroeconomic conditions and the number of black and Hispanic males applying for medical school, but found no such relationship for white male applicants. An inverse relationship between the economy’s wellbeing and number of applicants is consistent with economic theory. As summarized by the authors, theory suggests that higher rates of unemployment and/or lower wages increase the propensity to apply to programs that further one’s education (including occupations other than medicine) because of reduced employment opportunities and a decrease in the opportunity cost of attending medical school (i.e., foregone earnings while in school  are lower). The authors speculate that employment opportunities for black and Hispanic males are more tied to general economic conditions than are employment opportunities for white males, thus national economic conditions have a greater influence on the propensity of black and Hispanic males to apply to medical school.

Between 1980 and 2010, the time period covered by this analysis, the United States experienced five periods of economic downturn—two periods that lasted one or more years (1981-1982, 2007-2010), and three downturns lasting less than one year (1980, 1990-1991, 2001). The number of applicants to medical school is cyclical (with peaks and troughs), and during the three decades covered by this analysis there were three peaks (1980, 1994, 2010) and two troughs (1988, 2002) for male applicants.

Interpreting time series analysis using aggregate data is somewhat tricky because there is often high correlation between explanatory variables and small sample size (e.g., this study had 30 observations reflecting annual data from 1980-2010). One question is what non-economic events happened during these three decades that might help explain increases and decreases in the number of applicants and whether such events might disproportionately affect the number of black and Hispanic applicants?

Near the beginning of these three decades (1981), the Graduate Medical Education National Advisory Committee (GMENAC) predicted that, after the large expansion in medical school capacity in the 1960s and 1970s, the nation was headed for massive physician surpluses.[i] Between 1980 and 1988, the number of male applicants declined dramatically, while numbers of female applicants remained relatively constant. After a rocky economic start between 1980 and 1982, the general improvement in economic conditions during the 1980s might explain part of the decline in applicants. However, one cannot discount the impact of a general consensus at the time that the nation’s supply of physicians was growing much faster than demand.

From 1988-1994 the number of applicants rebounded, before starting to decline again from 1995-2002. The peak in number of applicants coincided with the release of a key report by the Council on Graduate Medical Education (COGME) emphasizing that the nation had too few generalists,  too many specialists, and too few minority physicians.[ii] One recommendation was to double the number of under-represented minority students and to provide incentives to increase the number of minority graduates. A 2005 COGME report provided greater detail on a national strategy to increase minority representation in the physician workforce.[iii] Unfortunately, the number of black applicants (male and female) remained relatively unchanged during the 15 years subsequent to this report. By comparison, beginning in the late 1990s, the number of Hispanic applicants continued to climb.

Both this 1994 COGME report and workforce studies sponsored by other organizations relied heavily on findings from a seminal study by Dr. Jonathan Weiner, which found that if the proportion of patients covered under Health Maintenance Organizations continued to increase,  the nation would need more generalist physicians and fewer specialists.[iv] During this period, the medical specialties with the greatest minority representation were the generalist specialties that COGME indicated should be expanded—internal medicine, family practice, and pediatrics.

Between 2002-2010, the number of applicants increased despite the fact that 2002-2006  was not a period of economic downturn. Instead, a non-economic event occurred in the early 2000s; when the nation’s taste for the more restrictive  managed care models  diminished, workforce studies were predicting the need for more physicians. Work by Dr. Richard Cooper and others predicting an impending physician shortage received considerable attention.[v]  A 2008 study by the Association of American Medical Colleges predicted a shortfall of 124,000 physicians by 2025 if current trends continued.[vi] These calls for training more physicians coincided with an increase in applicants from 2002-2010.

As articulated by Cort and Morrison, “[Medical school administrators] can benefit from understanding and appreciating that the behavior of certain applicants depends in part on the labor market. As such, certain groups could benefit from extra attention and incentives, especially when the labor market appears to be especially strong.”  While the strength of the labor market likely does influence the number of applicants, it is unclear from aggregate, time series data the degree to which economic conditions versus other factors—such as publicized reports of impending surpluses or shortages and changing models of care delivery and physician payment—affect the propensity to apply to medical school or other medical professions. To the extent that economic conditions do affect the number of applicants to medical school, when the number of students accepted is relatively constant from year to year then one thing is certain: a person might have a greater interest in applying to medical school during an economic downturn but the likelihood of acceptance is better during an economic upturn.


[i] Graduate Medical Education National Advisory Committee, Report of the Graduate Medical Education National Advisory Committee to the Secretary, Department of Health and Human Services. 1981.

[ii] Council on Graduate Medical Education. Recommendations to Improve Access to Health Care Through Physician Workforce Reform.  Fourth Report to Congress and the Department of Health and Human Services. January, 1994.

[iii] Council on Graduate Medical Education, Minorities in Medicine: An Ethnic and Cultural Challenge for Physician Training. U.S. Department of Health and Human Services. April 2005.

[iv] Forecasting the effects of health reform on US physician workforce requirement. Evidence from HMO staffing patterns. JAMA. 1994 Jul 20;272(3):222-30.

[v] Cooper RA et al. Economic And Demographic Trends Signal An Impending Physician Shortage. Health Affairs. January 2002, 21(1):140-154.

[vi] Dill MJ and Salsberg ES. The Complexities of Physician Supply and Demand: Projections Through 2025. Association of American Medical Colleges. November 2008.

Related Posts

Comments are closed.

%d bloggers like this: