How Do Physician Incomes Compare Across the United States, Canada, Sweden, and the Netherlands?

Buehler et al. (2026) asked how physician incomes compare across the United States, Canada, the Netherlands, and Sweden, and whether higher US physician pay reflects physicians’ relative position in the income distribution or higher incomes at comparable income levels. They analyzed administrative tax records covering nearly all physicians in each country. They found that physicians ranked among the highest earners everywhere, but US physicians earned much more. Eighty-four percent of US physicians were in the top 10% of earners, compared with about 60% elsewhere, and 26% reached the top 1%, versus 5%–19% in the other countries.

Why This Article Was Selected for The Policy Scientist

Physician compensation remains a central policy issue because it affects health care spending, workforce incentives, and the allocation of highly skilled labor. As populations age and health expenditures continue to grow, understanding why physician incomes differ across countries has become increasingly important. Buehler et al. have produced several influential studies on physician earnings and labor markets, and this article extends that research through a rare international comparison using comprehensive administrative tax records. Published in AEA Papers and Proceedings, a highly respected economics journal, the study offers unusually high-quality data and findings that are broadly applicable to other high-income countries. The descriptive statistical approach is appropriate for the research question, although future studies would be strengthened by applying causal inference methods to identify the institutional factors responsible for international income differences.

Full Citation and Link to Article

Buehler, A., Gottlieb, J. D., Hicks, J., Laun, L., Palme, M., Polyakova, M., Udalova, V., & Ventura, M. (2026). International comparison of physician incomes. AEA Papers and Proceedings, 116, 144–149. https://doi.org/10.1257/pandp.20261073

Central Research Question

This study examines how physician incomes compare across the United States, Canada, the Netherlands, and Sweden. Rather than simply documenting differences in average earnings, the authors ask a more fundamental question: Are higher physician incomes in the United States primarily explained by physicians occupying higher positions within the national income distribution, or because individuals at comparable positions in the US income distribution earn substantially more than their counterparts in other countries? They also examine whether these patterns differ across physician specialties, particularly between primary care physicians and specialists. By focusing on physicians’ positions within each country’s overall income distribution, the authors seek to place physician compensation into a broader economic context rather than treating physician salaries as an isolated labor market.

Previous Literature

The article builds upon a growing body of research examining physician labor markets, physician earnings, and the broader economics of income inequality. Previous work by several of the same authors has documented physician earnings and labor supply in the United States and explored how top-income inequality influences labor market outcomes. Other studies have investigated physician specialty choice, compensation incentives, and the economic value of health care professionals. However, direct international comparisons have been limited because comparable administrative income data have rarely been available across multiple countries.

The present study fills this gap by comparing physician earnings using harmonized administrative tax records from four developed countries. Rather than relying on physician surveys or self-reported earnings, the authors employ administrative data that provide nearly complete coverage of physician populations. This approach allows them to compare not only average earnings but also physicians’ locations within each nation’s income distribution. The study therefore extends previous research by providing a more comprehensive understanding of how physician compensation varies internationally and by identifying the extent to which national income structures explain observed differences.

Data

The authors use administrative tax records covering nearly the entire physician workforce in four countries. The analysis includes 2017 tax data from the United States, Sweden, and the Netherlands, together with 2015 tax data from Canada. Physicians are identified by linking tax records with national physician registries or occupational databases, providing exceptionally complete coverage of practicing physicians.

To facilitate international comparisons, income measures are harmonized as closely as possible across countries. All monetary values are adjusted for inflation and converted to purchasing power parity using 2025 US dollars. The analysis includes approximately 819,500 physicians in the United States, 100,660 physicians in Canada, 70,295 physicians in the Netherlands, and 55,097 physicians in Sweden.

The study examines both absolute income levels and physicians’ positions within each country’s income distribution. Rather than comparing salaries alone, the authors determine the percentage of physicians who fall within the top income decile, top percentile, and other income categories nationally. Additional analyses separate physicians into primary care and specialist groups, with further examination of obstetricians/gynecologists and surgeons where comparable data are available. The resulting dataset represents one of the most comprehensive international physician income databases assembled to date.

Methods

The study employs descriptive statistical analysis using administrative income distributions. First, the authors calculate the proportion of physicians occupying each percentile of their national income distribution. They then estimate average physician incomes within each percentile group across countries.

The most innovative component of the analysis is a decomposition exercise designed to separate two possible explanations for international income differences. The authors statistically reweight physician income distributions to estimate how much of the observed earnings gap results from physicians occupying different positions within their national income distributions versus differences in income levels associated with identical percentile positions. This decomposition isolates the relative contribution of national income structures without attempting to establish causal relationships.

The authors also compare income distributions across physician specialties, including primary care physicians, specialists, obstetricians/gynecologists, and surgeons. These analyses reveal whether specialty-specific income patterns remain consistent across different institutional settings.

Although the statistical methods are carefully designed and appropriate for answering the descriptive research question, the study does not employ causal inference techniques. Consequently, the analysis cannot determine whether differences in regulation, labor markets, reimbursement systems, or institutional arrangements cause the observed income differences. Future research using natural experiments or other causal inference approaches would strengthen understanding of the mechanisms responsible for these international differences.

Findings/Size Effects

Several clear patterns emerge from the analysis. First, physicians consistently rank among the highest earners in every country examined. Few physicians fall below the top two income deciles of their respective national income distributions.

The United States differs primarily in the concentration of physicians at the very top of the income distribution. Overall, 84 percent of US physicians belong to the top national income decile, compared with approximately 60 to 62 percent in Canada, the Netherlands, and Sweden. Even larger differences appear in the top percentile. Twenty-six percent of US physicians rank among the top 1 percent of earners nationally, compared with approximately 19 percent in both Canada and the Netherlands and only 5 percent in Sweden.

Absolute income differences are even more substantial. Average physician income exceeds $560,000 in the United States, compared with approximately $195,000 in the Netherlands, $186,000 in Canada, and $115,000 in Sweden after purchasing power adjustments. Physicians in the highest US income percentile earn nearly $1.2 million in household income, compared with roughly $500,000 in Canada and less than $400,000 in Sweden and the Netherlands.

The decomposition analysis produces the study’s most important finding. Differences in physicians’ relative positions within national income distributions explain no more than 22 percent of the earnings gap between the United States and the comparison countries. Instead, most of the US physician earnings premium reflects higher incomes associated with comparable positions in the broader US income distribution. In other words, US physicians earn substantially more primarily because top earners generally earn more in the United States, not because physicians occupy dramatically higher positions relative to other high-income Americans.

Specialty analyses reveal similar patterns across countries. Specialists consistently earn more than primary care physicians, although the magnitude varies. In the United States, 42 percent of specialists belong to the top 1 percent of national earners, compared with 27 percent in Canada, 21 percent in the Netherlands, and 7 percent in Sweden. Surgeons exhibit particularly strong concentration within the highest income categories, especially in the United States. These findings suggest that specialty premiums exist across health care systems, although they are amplified in the American market.

The authors also estimate the implications of hypothetical reductions in US physician incomes. If average physician earnings fell to Swedish levels, US health care spending would decline by approximately 6 percent, equivalent to roughly $291 billion or about 1 percent of gross domestic product. However, this change would require an average physician income reduction of approximately $343,000, representing a 75 percent decrease. Matching Sweden’s relative physician income distribution instead would reduce physician incomes by approximately 50 percent while lowering health care spending by approximately 3.8 percent, or about $195 billion.

Conclusion

The study demonstrates that physicians occupy exceptionally high positions within national income distributions across all four countries. However, the United States stands apart because physicians receive substantially higher incomes at comparable positions within the broader income distribution. The analysis shows that national income structures explain considerably more of the international physician earnings gap than differences in physicians’ relative income rankings.

The study’s principal strengths are its exceptionally comprehensive administrative data, nearly complete physician coverage, and innovative decomposition framework that places physician earnings within the broader national income distribution. These features provide a more informative comparison than simple salary averages. Although the analysis is descriptive rather than causal, it establishes an important empirical foundation for future research. Subsequent studies employing causal inference methods could identify which institutional arrangements, regulatory environments, or labor market mechanisms generate the international differences documented in this analysis.