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Wages and health worker retention: Evidence from public sector wage reforms in Ghana

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  • Antwi, James
  • Phillips, David C.

Abstract

Can governments in developing countries retain skilled health workers by raising public sector wages? We investigate this question using sudden, policy-induced wage variation in which the Government of Ghana restructured the pay scale for health workers employed by the government. We find that a 10% increase in wages decreases annual attrition from the public payroll by 1.0 percentage point (from a mean of 8 percentage points) among 20–35year-old workers from professions that tend to migrate. As a result, the ten-year survival probability for these health workers increases from 0.43 to 0.49. The effects are concentrated among these young workers, and we do not detect effects for older workers or among categories of workers that do not tend to migrate. Given that Ghana was a major source of skilled health professional migrants during this period and that our attrition measure correlates strongly with aggregate migration, we interpret these results as evidence that wage increases in Ghana improved retention mainly through reducing international migration.

Suggested Citation

  • Antwi, James & Phillips, David C., 2013. "Wages and health worker retention: Evidence from public sector wage reforms in Ghana," Journal of Development Economics, Elsevier, vol. 102(C), pages 101-115.
  • Handle: RePEc:eee:deveco:v:102:y:2013:i:c:p:101-115
    DOI: 10.1016/j.jdeveco.2012.10.004
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    3. Ebenezer Appiah-Denkyira & Christopher H. Herbst & Agnes Soucat & Christophe Lemiere & Karima Saleh, 2013. "Towards Interventions in Human Resources for Health in Ghana : Evidence for Health Workforce Planning and Results," World Bank Publications - Books, The World Bank Group, number 13116.
    4. Michael Clemens, 2014. "A Case against Taxes and Quotas on High-Skill Emigration - Working Paper 363," Working Papers 363, Center for Global Development.
    5. Michael A. Clemens, 2015. "Smart policy toward high-skill emigrants," IZA World of Labor, Institute of Labor Economics (IZA), pages 203-203, November.
    6. Clemens Michael A., 2014. "A Case Against Taxes and Quotas on High-Skill Emigration," Journal of Globalization and Development, De Gruyter, vol. 5(1), pages 1-39, June.
    7. Hasnain, Zahid & Manning, Nick & Pierskalla Henryk, 2012. "Performance-related pay in the public sector : a review of theory and evidence," Policy Research Working Paper Series 6043, The World Bank.
    8. Björn NILSSON, 2019. "Education and migration: insights for policymakers," Working Paper 23ca9c54-061a-4d60-967c-f, Agence française de développement.
    9. Augustine Kumah & Hillary Selassi Nutakor & Godwin Gideon Kwaku Dorvlo & Christoph Sah & Mordenu Honore Kormla & Haphsheitu Yahaya & Dzidefo Tuvor & Gifty Birago & Henry Okorie Ugorji, 2022. "Nurses’ Perception of Management Styles and Factors Influencing Retention of Nurses in Ghana: A Cross-Sectional Survey," American Journal of Economics and Business Administration, Science Publications, vol. 14(1), pages 12-20, April.
    10. Dunsch, Felipe Alexander & Velenyi, Edit, 2019. "Job Preferences of Frontline Health Workers in Ghana - A Discrete Choice Experiment," SocArXiv bqx5k, Center for Open Science.
    11. Beladi, Hamid & Chao, Chi-Chur & Ee, Mong Shan & Hollas, Daniel, 2015. "Medical tourism and health worker migration in developing countries," Economic Modelling, Elsevier, vol. 46(C), pages 391-396.
    12. Dafnis N. Coudounaris & Isaac Nana Akuffo & Annie Owusua Nkulenu, 2020. "Human Resource Management for Ghanaian Nurses: Job Satisfaction Versus Turnover Intentions," Sustainability, MDPI, vol. 12(17), pages 1-19, August.

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    More about this item

    Keywords

    Human resources; Human development; Income distribution; Migration;
    All these keywords.

    JEL classification:

    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health

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