LAUSR

The U.S. Veterans Administration (VA) is a large publicly financed health system that has long struggled with provider shortages. Shortages may arise at the VA because it offers different compensation than private sector employment options or because of differences in the way that labor is supplied to public versus private employers. In the mid-2000s, the VA adopted a more generous and flexible pay schedule for its dentists. We exploit this salary schedule change to study the impact of a positive wage shock on dental labor supplied to the VA, within a difference-in-differences framework. We find limited effects on VA separation and new hire rates overall-though early career dentists appear more sensitive to the wage change. More generous pay has its clearest effects on employment type for VA dentists, reducing the likelihood of being part-time by roughly 10%.