Does salary affect the choice of residency in non-university teaching hospitals? A panel analysis of Japan Residency Matching Programme data

Background: Previous studies have investigated factors that are influential on the choice of training hospitals among residency physicians, but the effect of salary was not conclusive. In this study, we aimed to examine whether a higher salary attracted more residents to non-university hospitals participating in the Japanese Residency Matching Programme. Methods: Data on 475 hospitals/programmes between 2006 and 2009 were available for analysis. We first conducted an ordinary least squares regression analysis on the ratio of the number of applicants to the residency programme quota as an index of resident's choice, for comparison with previous studies. We further performed panel data analysis to better control for unobserved heterogeneity across hospitals, which could be confounded by the amount of salary. We also performed stratified analysis by the population size of the hospital location. Results: In ordinary least squares regression, salary showed a positive, but not significant association, with the ratio of the number of applicants to the programme quota, while the results of a fixed effect model exhibited a positive and significant effect of salary (epsilon= 0.4995, P = 0.015) on the ratio. Analysis stratified by city size showed that the elasticity of salary was comparable (epsilon= 1.9089, P = 0.016 in large cities versus epsilon= 1.9185, P = 0.008 in small cities), while that of the number of teaching physicians was larger in large cities (epsilon= 1.9857, P = 0.009) compared with that in small cities (epsilon= 1.6253, P = 0.033). The number of teaching physicians had a significant and negative effect modification on salary, implying an antagonistic effect between these two attributes (epsilon= -1.5223, P = 0.038). Conclusions: Our results indicate that the amount of salary influences the choice of training hospitals among medical graduates who choose non-university settings. Use of a monetary reward in a residency programme could be a feasible tactic for hospitals to attract residents.