well

for one thing with dentists you are relying on their honesty and competence as i learned when i decided to get a second opinion on a proposed 3500 dollar procedure. the second dentist did it for $80 and left me far less damaged than what the first was proposing.

there is something more to the equation than just putting dentists into competition with farm workers.

"for one thing with dentists you are relying on their honesty and competence"

Right. And this is different from our relationship with dentists fifty years ago, exactly how?

We "rely on the honesty and competence" of schoolteachers and childcare workers, too, but not very many of them make $200,000 a year. Which suggests that there is indeed "something more to the equation," and that it isn't just a matter of us needing dentists to be wildly more trustworthy than any other profession.

Patrick,

Dentistry usually requires a doctorate, teaching and childcare work doesn't. I would venture that explains the difference in earnings. Teaching and social work requires a bachelor degree, so their supply is regulated by H1-B visas as well. Perhaps dentist immigrants are more restricted by other regulation, I don't know, but if Dean's back-of-the-envelope estimate of $150k for a dentists salary with better immigration, there is still at least $100k difference between dentists and teachers to explain. To the extent that a doctorate is a certification of competence in your field, yes, some of it is about competence.

Teachers with doctorates, whether university professors or secondary or primary school teachers, don't make $200,000. There are several Ph.D. teachers in my sons' schools, both middle school (7th and 8th grade) and high school. I don't know what they make, but it's not $2.0e5. It might be as much as $5.0e4, but I'd be surprised if it were more.

Also impacting the wages would be collective bargaining agreements for teachers, and that dentists services are sold in a competitive market whereas teachers services are sold in a market much more like a monopsony, so the true value of the marginal productivity of labor would not be captured by the wage for teachers. Also I suspect a medical doctorate is harder than an education doctorate, requiring greater costs of time, and effort, so the higher cost of human capital investment would affect the labor supply curve.

But I'm just offering market forces other than immigration that may explain wage differences, maybe the immigration laws are different for dentists and teachers, and maybe that does affect relative wage differences.... Dean?

While it is ceratinly true that Ph.D. teachers in our public schools are underpaid, the question I have is if you compare the increase in dental fees since 1980 with the increase in medical fees since 1980, which would be greater? Also, we should rely on more than just "honesty and competance" which we rightfully deserve. I hope they all have a nationally regulated level of skill. After all, they use eyes and fingers, not big machines, to do their work. These are subjective and highly variable things. If the foreign dentists display the same skill level and knowledge, then they should certainly be able to practice here. However, it is very likely they will call for the same fees their neighbor dentists are calling for. They after all are just as good. So, I don't know if it will reduce the cost of dental care. As I stated in the beginning, I think the problem is systemic within the entire health care industry, and it is not a single factor like the dentists causing this problem.

Nonsense. Our hospitals are full of doctors from every part of the world. They're subject to the same standards of training and quality as native-born doctors, and they do just as good a job.

Dentistry should be no different, and yet it is. Foreign dentists can't practice here, native-born dentists make $200,000 a year, and an increasing number of our citizens can't afford to have their teeth attended to.

You don't need to invent complicated explanations to account for these facts. Their relationship is clear and obvious. Dentists have bought themselves protectionist legislation that guarantees them higher incomes.

Meanwhile, people suffer because they can't afford to have their teeth attended to. I've sat in emergency dental clinics and watched patients come in with the kind of jawbone-destroying abscesses that ought never happen in a modern, developed country.

I see no reason to pretend this state of affairs is anything but protectionist self-enrichment at the expense of public health.

Folks, BTP is an economics blog and let's use some economics here.

AO, it's all about supply and demand, and people who have access to power that could erect entry barrier to their profession to limit the number of suppliers or competitiors whether they are doctors or dentists. The more dentists we have, the lower their fees as public have more choices. Fine, if our country cannot produce enough dentists or engineers ourselve then we should pass the law to import them as like we are doing to import farm workers to alleviate the lack of farm labor as no Americans would do that kind of labor. And folks, there are smart doctors and dentists in the world too, and they don't mind practicing here.

My dentist is Chinese (Taiwan, I think). My doctor - or one of them - is from India. Their fees haven't gone up much in the last five years. I don't know if I'm lucky or if they're exceptions.

I just spent $13k in Tiajuana for dental work that was quoted as high as $60k in the US.

There were patients visiting that office from as far away as Boston.

The free traders are just over the border and if you find the right one the care and work is just as good.

My dentist was ADA certified.

AO wrote, ...so the true value of the marginal productivity of labor would not be captured by the wage for teachers.

I think the claim that wages are even moderately correlated to marginal productivity is pretty questionable, on empirical grounds.

Anonymous wrote, If the foreign dentists display the same skill level and knowledge, then they should certainly be able to practice here.

Competence of immigrant dentists could be evaluated without erecting the barrier to entry that Dean describes.

However, it is very likely they will call for the same fees their neighbor dentists are calling for. They after all are just as good.

Have you heard of something called "the law of supply and demand"?

Liberal,

"I think the claim that wages are even moderately correlated to marginal productivity is pretty questionable, on empirical grounds."

For teachers, VMPL would not be equal to wage because it is not a competitive market, which is exactly what I said. For a competitive market however it would be. Can you show me the empirical evidence that shows that wages are uncorrelated with value of marginal productivity in a competitive market? I'm not saying you're wrong, but that does contradict the theory, so I'm interested to see the empirical data where you've drawn that conclusion from.

AO wrote, Can you show me the empirical evidence that shows that wages are uncorrelated with value of marginal productivity in a competitive market? I'm not saying you're wrong, but that does contradict the theory, so I'm interested to see the empirical data where you've drawn that conclusion from.

Empirical data? Looking around me. Also noting news reports that show well-paid people destroying value all the time, and yet their pay doesn't go down to zero. Or other extremely common weird behavior of the labor market, even in quite competitive situations.

As for theory, I think the notion that firms really have a good handle on the relative marginal product of most of their workers is laughable. Not to mention that production decisions often, or even usually, cannot be made on the margin, so the theory seems a little incoherent in many cases.

If it's a firm where workers do piece work, it's a defensible claim. But most workers aren't in that situation.

i don't think anyone understood what i was trying to say, but that's fine since i don't either. i only wanted to mention that not all dentists are honest. No doubt competence can be tested somehow. Honesty is a little trickier.

I imagine, with no ideological bias, that poor people don't get dental care, not because they can't afford it... basic care costs less than a pair of sneakers...but because they have other priorities, or don't understand the need.

and i suspect dentists can't make the money doctors can because no one is dying from tooth decay... at least not directly. but then it becomes the doctors' job.

i don't quite see the point of impoverishing dentists so people can get their teeth done for less than they spend on beer.

neither the medical care problem nor the poverty problem are going to be solved by immigration policy one way or the other.

oh,

just to reestablish my liberal credentials, i would support the government paying for dental care for the poor.

simply because it would be the best way to get them to take care of their teeth, and we'd probably get more back in productivity than it would cost in taxes.

Liberal,

Thats anecdote not empirical evidence, something you may want to consider when making claims on empirical grounds.

AO,

I'm not sure what the point is about marginal product. If we made it illegal to pay custodians less than $100 an hour (and applied the death penalty to violators) then the MP of custodians would be $100. Similarly, if we have restrictions that make it more difficult for people to work here as dentists (either foreign or native born), then we will raise their marginal product. Let's take it as a given that their marginal product is equal to their current average pay (@200 k), what does this prove?

Why does no one question Dean's numbers? $200,000 average salary for a dentist? Does the NYT site a source for that number?

Salary.com for example, puts the median at about $126K.

http://swz.salary.com/salarywizard/layouthtmls/swzl_compresult_national_HC07000220.html

Dean,

My point is there are additional reasons for the disparity between teachers wages and dentists wages. One is that in a competitive market, VMPL will equal wage, but this would not be the case for teachers, because they operate in a labor market much more like a monopsony. For dentists, the labor market is relatively more competitive, so this will hold.

Clearly, immigration restriction needlessly inflate the wages of dentists, and would inflate the wages of teachers if they operated in enough of a competitive market to be affected by them.

Erik Lwrote: Why does no one question Dean's numbers? $200,000 average salary for a dentist? Does the NYT site a source for that number?

Let's not get hysterical. The source is the ADA: http://www.ada.org/ada/prod/survey/faq.asp

Another factor is insurance. Based on my memory and observation, dental insurance started as a relatively low-cost employer-provided benefit. People who used dentists were used to paying a certain amount for services; with insurance, the dentist could raise the price by 50% and the patient was still paying less than previously. In fact, the patient was deliriously happy to have the insurance rather than to have to pay the steep fee increase. And since only a few poor kids die of dental problems, good teeth isn't seen as a moral issue.

The explosion in dental fees seems to have started after the widening availability of insurance. I don't think it's altogether the much vaunted law of supply and demand with supply artificially restricted; it's the pricing power of suppliers in a market where "consumers" have neither the knowledge nor the financial power to engage in classical market behavior.

I find health-care-as-business a stressful model. Even if I knew how, I would be hesitant to bargain too hard with somebody who was about to stick a drill in my mouth.

nihil

thanks. that's about what i think. i have seen a huge difference between good dentist and bad. very hard for the cutomer to tell until it's too late.

but if it costs me about a hundred bucks a year to take care of my teeth, i don't begrudge it to the man who has to spend his working life crouched over an endless series of open mouths doing painfully intricate work.

i've got nothing against chinese dentists, but i bet there are a lot of chinese who could use a good low cost dentist more than i could.

The first time you have to see a dentist for something other than a checkup, you will learn very quickly that it takes more than "a hundred bucks a year" to take care of your teeth.

as like we are doing to import farm workers to alleviate the lack of farm labor as no Americans would do that kind of labor.

I believe you meant to say "not enough Americans would do that kind of labor at the wages currently offered." Really, though, illegal farm labor isn't about the wages; it's about the working conditions. When your labor force is hiding from the law, you don't have to worry about additional costs--like workers' compensation, supervision of managers, benefits, and liability if you violate wage-hour laws.

mythago

if you see a dentist for a hundred bucks once every year and do what he says you won't need those high priced services.

at least most people won't. but then there is that issue of honest dentists that i raised before.

my point is still that dentistry is not that expensive that we need to import farm laborers to do the work cheap and discipline the market.

and, migrant laborers don't complain about being sprayed with pesticides either.

Actually, the dollar is immediately borrowed by the Government and put to use in all the things they do. In a way the Trust Fund is a type of forced savings. The payee eventually gets back the principal with interest when he retires or is disabled. Any kind of retirement savings does the same thing, though private retirement funds obviously invest much more in the private sector.