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Health labor market institutions, health workers choices and incentives, in Ethiopia

Health labor market institutions, health workers choices and incentives, in Ethiopia. Agnes Soucat , May 2009. Background. Part of the HSO work program set up by AFTHD in The World Bank, and supported by The Bill and Melinda Gates Foundation, the Governments of Norway and France

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Health labor market institutions, health workers choices and incentives, in Ethiopia

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  1. Health labor market institutions, health workers choices and incentives, in Ethiopia Agnes Soucat, May 2009

  2. Background • Part of the HSO work program set up by AFTHD in The World Bank, and supported by The Bill and Melinda Gates Foundation, the Governments of Norway and France • Objective to improve the quality of the dialogue on Human Resources for Health through an enhanced understanding of labor markets and the design of evidence based policies • Currently under implementation in four African countries: Ethiopia, Rwanda, Ghana, Zambia

  3. Background • Four key areas in the program • Production • Distribution • Performance • Financing

  4. Health labor market institutions, health workers choices and incentives, • The aim is to look at health service delivery from the health worker’s and health labor market perspective • Analyze health workers’ constraint choices using labor and behavioral economics

  5. Motivation • Facts • 27,000 people per physician • Health workers concentrated in Addis Ababa • Policy questions • What affects career choices of health workers? • What is the cost of inducing rural labor supply? • What are the long-term effects of rural postings?

  6. Background on Ethiopia • Population – about 75 million • Rural – about 85% • 8 regions – 3 big ones • Oromia, 26m • Amhara, 19m • SNNPR, 14m • Our survey • Addis Ababa, 3m • SNNPR, 14m • Tigray, 4m Tigray SNNPR

  7. Background, data and method • Qualitative diagnostic study (2003) • with different types of health workers and users of health services • Survey with final year health students (2004) • Telephone follow-up (2005) • Re-interview at place of work (2007) • Household survey of health workers (2007)

  8. Student Survey Sample • 219 final year nursing students from 8 schools representing 16% of 2002/3 cohort • 90 final year doctor students from all 3 medical faculties representing 49% of cohort

  9. Household Survey Sample

  10. 1. Choosing between a rural and an urban post • Our data confirms the low presence of health workers in rural areas: in 2007 on average 30% of hws work in a rural post (36% for nurses and 17% for doctors) • Willingness to work in rural areas • Measured in both 2004 and 2007 using contingent valuation questions

  11. Contingent valuation question Imagine that when you finish your studies you get two jobs as a health worker in the public sector, one in Addis Ababa and one in a rural area 500 km from Addis Ababa. Both contracts are for at least 3 years. Your monthly salary for the job in Addis Ababa would be 700 Birr. Which job would you choose if your monthly salary for the rural job would be $ amount.

  12. Cumulative distribution for reservation wages for rural (200km) and remote (500km) post

  13. Nurses’ reservation wage to work in a rural area 2004 and 2007

  14. What explains a health worker’s willingness to work in a rural area? “There is an obvious difference between rural and urban postings. Working in rural areas involves helping the poor... in urban areas, one can learn, have more income, have good schools for one’s children.” Health worker in Ethiopia

  15. What explains the heterogeneity in health workers’ willingness to work in a rural area? 2004 • parents’ household welfare(-), • urban back ground (-) • intention to help the poor (+) • ‘catholic’ (+): proxies school curriculum and culture 2007 • female (-) • ‘catholic’ (+): proxies school curriculum and culture

  16. CV questions remain hypothetical; do we have ‘harder’ data • Job quitting data provides us with harder evidence on (un)willingness to work in a rural area • The most important reason to leave a rural post is: • ‘do not like the location’ (nurses)

  17. 2. Job satisfaction • We asked respondents to • rank different job attributes according to their importance • Indicate satisfaction on each of these attributes • We also asked questions on satisfaction with life, economic situation and career

  18. 3. Income Joost De Laat, Kara Hanson, William Jack

  19. Market pressure in Ethiopia.. Source : World Bank- NORAD GATES HRH program

  20. Discrete Choice Experiment Job attributes • Pay • Location – Urban vs Rural • Housing • Equipment conditions • Service requirement after training (1 or 2 years) • (Docs) Private sector activity permitted (0 or 1) • (Nurses) Supervision

  21. Rural salary bonuses - doctors Share willing to work in rural area 100% Superior housing Basic housing+ improved equipment Basic housing 50% Time Baseline Improved equipment 100% 200% 300% Rural salary bonus

  22. Rural salary bonuses - nurses Share willing to work in rural area 100% Basic housing+ improved equipment Basic housing Improved equipment Supervision 50% Superior housing Time Baseline 100% 200% 300% Rural salary bonus

  23. New graduates • To get 80% in rural areas need to 284% wage increase for nurses and 245% for doctors • Proportion of nurses willing to work in rural areas has declined fom 31% to 18%

  24. 4. International migration • More than 50% of health workers plan to emigrate abroad in the next two years • 12% of nurses and 18% of doctors in 2004 • Those with lower job satisfaction are more likely to plan emigration abroad • We also measure willingness to migrate abroad using contingent valuation

  25. B 6,000 and B10,500 fo 70% of nurses and 80% of doctors not to leave the county • 500% to 600% increase in salary • Doctors more inclined to leave the country than nurses

  26. Conclusions • It costs a lot to get doctors and nurses to work in rural areas • But the way the incentives and the financing are structured matters • Housing might work for doctors • Equipment seems important for nurses

  27. Motivation • Facts • 27,000 people per physician • Health workers concentrated in Addis Ababa • Policy questions • What is the cost of inducing rural labor supply? • What are the long-term effects of rural postings? • What are the effects and effectiveness of lottery allocation?

  28. Sample

  29. Descriptive Statistics

  30. Incomes

  31. Discrete Choice Experiment Job attributes • Pay • Location – Urban vs Rural • Housing • Equipment conditions • Service requirement after training (1 or 2 years) • (Docs) Private sector activity permitted (0 or 1) • (Nurses) Supervision

  32. Marginal attribute valuations

  33. Supply responses to attribute changes

  34. Wage equivalents for doctors

  35. Rural salary bonuses - doctors Share willing to work in rural area 100% Superior housing Basic housing+ improved equipment Basic housing 50% Time Baseline Improved equipment 100% 200% 300% Rural salary bonus

  36. Rural salary bonuses - nurses Share willing to work in rural area 100% Basic housing+ improved equipment Basic housing Improved equipment Supervision 50% Superior housing Time Baseline 100% 200% 300% Rural salary bonus

  37. Conclusions • It costs a lot to get doctors and nurses to work in rural areas • But the way the incentives and the financing are structured matters • Housing might work for doctors • Equipment seems important for nurses

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