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

• 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

Background

• Four key areas in the program

– Production

– Distribution

– Performance

– Financing

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

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?

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

Background, data and method1. Qualitative diagnostic study (2003)

– with different types of health workers and users of health services

2. Survey with final year health students (2004)

3. Telephone follow-up (2005)

4. Re-interview at place of work (2007)

5. Household survey of health workers (2007)

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

Household Survey Sample

Addis Ababa SNNPR Tigray Total

Facilities 40 39 18 97

Hospitals 6 12 11 29

Health centers 34 27 7 68

Health workers 362 206 293 861

Doctors 91 72 56 219

Nurses 271 221 150 642

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

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.

47. 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 500km 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…

47.1 Your monthly salary for the rural job would be 600 Birr

I would choose the job in Addis Ababa

I would choose the job in the rural area










47.5 Your monthly salary for the rural job would be 1,000 Birr









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

0102030405060708090

100

600 700 800 900 1000 1100 1200

nursing student (200Km) nursing student(500Km)

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

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

Table 1: Least squares estimation of the log of the reservation wage to work in a rural area 2004 2007 Nursing and Medical students

Nursing and Medical students

AGE -0.02 -0.01 -0.01 -0.01 (2.94)** (2.08)* [0.417] [0.620] FEMALE 0.03 0.03 0.39 0.41 (0.69) (0.82) [0.002]*** [0.001]*** EXP (in 000) 0.03 0.03 0.04 0.02 (2.84)** (2.74)** [0.496] [0.674] TSCORE -0.16 -0.11 -0.32 0.01 (0.79) (0.54) [0.626] [0.984] ADDIS 0.07 0.07 0.05 0.10 (1.91)+ (1.91)+ [0.776] [0.532] DIST (in 000) -0.13 -0.24 -0.00 -0.00 (0.21) (0.41) [0.976] [0.923] HELPPOOR -0.14 -0.12 -0.06 0.02 (3.93)** (3.14)** [0.640] [0.848] TIGRAY 0.09 -0.10 (1.34) [0.616] CATHOL -0.14 -0.41 (2.44)* [0.036]** PROTEST 0.04 0.22 (1.00) [0.100]* DOCTOR 0.83 0.80 0.99 0.94 (16.22)** (15.75)** [0.000]*** [0.000]*** Constant 7.03 6.92 7.63 7.39 (40.39)** (39.59)** [0.000]*** [0.000]*** Observations 220 220 206 204 R-squared 0.75 0.76 0.279 0.315 Absolute value of t statistics in parentheses + significant at 10%; * significant at 5%; ** significant at 1%

• 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

• 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)

Figure 14: Reasons why nurses quit their first job, by location

2. Job satisfaction

• We asked respondents to 1. rank different job attributes according to

their importance2. Indicate satisfaction on each of these

attributes• We also asked questions on satisfaction

with life, economic situation and career

Figure 4: Importance of different job characteristics in 2004

Figure 5: Importance of different job characteristics in 2007

Figure 6: Satisfaction with job characteristics

3. Income

Labor Market: Doctors

Addis SNNPR Tigray

Proportion working private sector 56% 10% 0%

Salary (US$ per month) - public sector 244 144 178

Salary (US$ per month) - private sector 485 253 --

Income (US$ per month) 409 181 237

Participated in lottery 59% 57% 58%

Specialist training 39% 6% 20%

Joost De Laat, Kara Hanson, William Jack

Market pressure in Ethiopia..

0

100

200

300

400

500

600

AddisPublic

AddisPrivate

SNNPR Tigray

Extra incomeSalary

Source : World Bank- NORAD GATES HRH program

http://www.africahrh.org/index.asp

Discrete Choice ExperimentJob attributes

1. Pay

2. Location – Urban vs Rural

3. Housing

4. Equipment conditions

5. Service requirement after training (1 or 2 years)

6. (Docs) Private sector activity permitted (0 or 1)

6. (Nurses) Supervision

Rural salary bonuses - doctors

100%

50%

Baseline

Basic housing+improved equipment

Time

Basic housing

Superior housing

Improved equipment

Rural salary bonus

100% 200% 300%

Share willing towork in rural area

Rural salary bonuses - nurses

100%

50%

Baseline


Time

Supervision

Basic housing

Superior housing

Improved equipment

Rural salary bonus

100% 200% 300%


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%

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

• 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

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

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?

SampleAddis Ababa SNNPR Tigray Total

Facilities 40 39 18 97

Hospitals 6 12 11 29

Health centers 34 27 7 68

Health workers 362 206 293 861

Doctors 91 72 56 219

Nurses 271 221 150 642

Descriptive Statistics

Facility Level Information

Addis SNNPR Tigray

Sufficient water supply 88% 55% 72%

Sufficient medicine 64% 87% 77%

Sufficient basic care equipment 74% 100% 79%

Demographics: Doctors Addis SNNPR TigrayMale 79% 97% 73%Single 30% 66% 55%Age 40 30 32Own a car 40% 2% 5%Own house 26% 10% 16%

Incomes

Labor Market: Doctors

Addis SNNPR Tigray

Proportion working private sector 56% 10% 0%

Salary (US$ per month) - public sector 244 144 178

Salary (US$ per month) - private sector 485 253 --

Income (US$ per month) 409 181 237

Participated in lottery 59% 57% 58%

Specialist training 39% 6% 20%

Discrete Choice ExperimentJob attributes

1. Pay

2. Location – Urban vs Rural

3. Housing

4. Equipment conditions

5. Service requirement after training (1 or 2 years)

6. (Docs) Private sector activity permitted (0 or 1)

6. (Nurses) Supervision

Marginal attribute valuations

(Percent of base salary) Doctors Nurses

Location 27% 72%

Housing 32% 47%

Equipment 26% 50%

Time 18% 12%

Private sector/supervision 48% 33%

Supply responses to attribute changes

(Probability of choosing rural job) Doctors NursesBaseline 7% 4%Provide basic housing 11% 9%Provide superior housing 27% 16%

Provide equipment 17% 21%Reduce time requirement 11% 6%Equipment and housing 23% 32%

Improve supervision (nurses) 7%

Wage equivalents for doctors

(Share of base salary) Male FemaleProvide basic housing 12% 12%Provide superior housing 45% 47%

Provide equipment 24% 36%

Reduce time requirement 14% 7%Equipment and basic housing 36% 48%

Rural salary bonuses - doctors

100%

50%

Baseline


Time

Basic housing

Superior housing

Improved equipment

Rural salary bonus

100% 200% 300%


Rural salary bonuses - nurses

100%

50%

Baseline


Time

Supervision

Basic housing

Superior housing

Improved equipment

Rural salary bonus

100% 200% 300%


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

Documents

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