In a study being published this month in the Journal of Human Capital, we try to shed light on these questions by looking closely at doctors in primary-care fields and a plausible alternative career for anyone entering medical school -- Physician Assistants. Physician assistants (PAs) are medical professionals who diagnose and treat illness under the supervision of a physician and who may, in all 50 states and the District of Columbia, write prescriptions. The first PA program started in 1965 at Duke University, and was initially designed to provide civilian medical training to field medics returning from Vietnam.

Interestingly, while the PA field started out all male, the majority of graduates today are female. The PA training program is generally 2 years, shorter than that for doctors. Unsurprisingly, subsequent hourly earnings of PAs are lower than subsequent hourly earnings of doctors.

Focusing on the financial repercussions of these career choices, we use a tool common for analyzing investment called a net-present-value (NPV) calculation. An NPV calculation adds up the costs of obtaining a degree, and all of the earnings received over the career that degree enables, taking into account the fact that money earned later is not as valuable as money earned earlier (due to interest), summarizing a career decision in a single number. This captures the insight that in order for an investment in the high up-front cost medical degree to overcome the lower up-front cost of a PA degree, not only do a doctor's wages have to significantly exceed those of the PA, but the doctor needs to be willing to work enough hours to make those wages pay off.

To see if doctors do indeed work long enough hours, we looked at data from a Robert Wood Johnson survey of physicians on how many hours female and male primary-care physicians work at different points in their careers. We combined that with data from the American Academy of Physician Assistants.

We then compared the earnings of male and female physicians in our data and estimate what those individuals would have earned if they had worked as PAs.

We found that, for over half of woman doctors in our data, the NPV of becoming a primary-care physician was less than the NPV of becoming a physician assistant. In contrast, the vast majority of male primary-care physicians earned an NPV greater than the NPV earned by a male PA. That is, while the vast majority of male doctors are financially better off for having become a doctor, the median female primary care physician would have been financially better off becoming a PA.

Where does this result come from? As you might have guessed, it is partially due to a wage gap. Male doctor earns more per hour relative to the male PA than the female doctor earns relative to the female PA. However, a big part of the difference comes from an hours gap. The vast majority of male doctors under the age of 55 work substantially more than the standard 40 hour work week. In contrast, most female doctors work between 2 to 10 hours fewer than this per week.