Students performance vs. hospital performance in the labor market for medical interns and residents. Do hospitals perform better due to asymmetry in information available to them relative to students?
This paper concerns the labor market for medical interns and residents in the U.S., and in particular, the question of whether the current matching mechanism between graduating medical students and hospitals is 'informationally inefficient'. It was found that overall students performed better than hospital programs in contrast to the common claim that hospitals are more likely to perform better due to seeming superiority in analyzing publicly available information or through access to non-publicly available information. We also conducted a similar analysis for the different specialty programs. In six specialty programs the students' performance was better than hospitals, in two specialty programs the hospitals performance was better than the students and in 14 specialty programs the difference in performance was not statistically different from zero. Thus, only in two cases the hypothesis that the specialty market is informationally inefficient cannot be rejected using the data available. It should be noted that this market is atypical (compared with other labor markets) in that we can test whether it is informationally inefficient by using a practical definition adopted from the field of finance.