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How much do doctors earn? Why it’s the highest paying job in America.

Online Niel November 6, 2024

Question: What are the 20 highest paying jobs in America?

Answer: Doctor.

It’s almost true: Of the 20 American occupations with the highest average salaryaccording to the Bureau of Labor Statistics, 16 are some kind of doctor.

Pediatric surgeons earn $449,320 a year on average as of 2023, according to federal data. Cardiologists earn $423,250. Orthopedic surgeons receive $378,250.

Only four of the 20 highest paying professions are not doctors. They are dentists. (And orthodontists, dental surgeons and specialists.)

Doctors earn more than any other broad category of workers, according to federal data: More than engineers. More than Computer. More, even, than lawyer.

To find a higher-paid group than doctors, economists say, you have to look at elite subcategories like corporate CEOs and law partners. The average partner at a large firm wins over $1 million a year. The typical S&P 500 CEO raised $16.3 million in 2023, according to the Associated Press.

American doctors are so well paid that a group of economic researchers spent years trying to figure out why.

Here’s what they found.

A lot of school, a lot of hours

As any medical school applicant knows, you have to study a lot to become a doctor: college, then medical school, and years of post-graduate residency training.

And the hours are long. The typical doctor’s week ranges from 40 hours to 60 or more, the researchers found, depending on the specialty.

“There’s a lot of training and long hours that go into the job and that’s naturally associated with higher earnings,” said Joshua Gottlieba University of Chicago economist involved in the research.

Gottlieb and his colleagues found that within the medical profession, doctors tend to earn more in specialties that require more training and longer hours. Each additional year of training, for example, translates into $143,000 in additional annual income.

But education and work hours don’t tell the whole story. Farmers and ranchers work long hoursan old federal report shows, and they don’t earn a doctor’s pay.

As for training: Many of Gottlieb’s colleagues in academia spend as many years in school as doctors. And most teachers win less than $100,000 per year.

“My brother is an emergency physician and I’ve been in school longer than him,” he said Teresa Ghilarduccichair of economics at The New School for Social Research in New York. She was not involved in Gottlieb’s study.

Doctors like money

Gottlieb and his collaborators drew criticism from doctors for saying this, but their research found that doctors were looking for better-paying jobs.

The doctor earned an average of $350,000 as of 2017, researchers reported in a Working Paper 2023which awaits publication in the Quarterly Journal of Economics. The top 1% of physicians earned more than $1.7 million per year.

Researchers have found that doctors at the best medical schools flock to the highest-paying specialties. Doctors also prefer procedures that produce more profits.

Some medical specialties are extraordinarily well paid. Here are some of the top salaries in 2017 for doctors in their prime, ages 40 to 55, according to Gottlieb and his colleagues:

Neurosurgery: $920,500
Orthopedic Surgery: $788,600
Dermatology: $655,200
Heart surgery: $607,300
Ophthalmology: $597,000

“We’re seeing people gravitate to specialties where the pay is going up,” Gottlieb said, just like salary-conscious workers in any field. “I think it’s the human way.”

Maria Polyakovaassociate professor at Stanford’s medical school, joined Gottlieb in the research. She notes that medical graduates tend to be exceptional students with plenty of career options.

“For the most part, they are top students in the country who could have pursued other opportunities that pay just as well,” she said.

The American Medical Association noted in a statement to USA TODAY that doctors often spend 12 to 15 years in training, typically leaving medical school with more than $200,000 in debt. High wages help them get out of debt and make up for years of lost work.

There are not enough doctors

The United States has less doctors per capita than most other developed nations, according to the Organization for Economic Co-operation and Development: 2.7 per 1,000 potential patients in 2021, compared with 3.4 in France and 4.5 in Germany.

A big reason, the researchers say, is that the medical industry and the federal government keep a lid on the number of places in US medical schools and hospital residencies.

The shortage comes from an era when health industry leaders thought we had too many doctorsleading to limits on medical school enrollments and residents. Ironically, the same groups are now warning about a lack of doctors.

The medical association says its changing position reflects the evolving state of the industry, noting that the current crop of doctors is aging and facing exhaustion.

“We have kind of an artificially limited supply of doctors,” he said Andrew Biggsa senior fellow at the right-wing American Enterprise Institute who was not involved in Gottlieb’s research. “This is what economists call a barrier to entry,” he said, and it drives up doctors’ salaries.

The American Medical Association is “acting as a union for doctors” by limiting their numbers, Biggs said. “The goal is to keep wages high.”

The government sets the prices

A basic reason doctors earn a lot is that health care costs a lot, researchers say. And the federal government largely sets these prices.

Medicare, the federal insurance program, sets the prices for medical services. The prices are high enough that the health expenses represent at least 17% of the nation’s gross domestic product.

“The government has decided, the policy has decided, to devote a very large portion of society’s resources to health care,” Gottlieb said.

Customers – patients – have little say in the cost of their medical care.

“It’s not like you’re comparing prices at surgeons,” Biggs said.

That configuration, economists say, makes the health care sector almost unique among American industries.

“In some ways, the medical industry is like a defense contractor,” Ghilarducci said. Their “main customer,” the federal government, “has deep pockets.”