Incentives and Dynamics in the Ethiopian Health Worker Labor Market

The supply and geographic distribution of health workers are major constraints to improving health in low-income countries. A number of recent studies have highlighted the shortage of skilled health workers in many settings (World Health Organization [WHO], 2006), the impact this has on health outcomes (Anand and Barnighausen, 2004), and the risk this poses for the achievement of the Millenium Development Goals (WHO, 2006; joint learning initiative, 2004). However, there remains limited evidence about what sorts of policies will attract nurses and doctors into medical training, improve the retention of trained health workers, and encourage them to work in rural areas where problems of inaccessibility of services are most acute. Finally, our predictive results are based on a discrete choice experiment that was part of the questionnaire. This component of the study enables us to estimate the value that doctors and nurses place on different job attributes, and how they vary across individuals. Providing high quality housing would increase physician labor supply to about 27 percent, which is equivalent to paying a wage bonus of about 46 percent. Doubling wages paid to nurses for work in rural areas outside cities increases their labor supply from 4 percent to 27 percent, while the non-wage attribute that is most effective in inducing them to relocate to rural areas is the quality of equipment and drugs. The same impact could be achieved by increasing rural nursing wages by about 57 percent for men and 69 percent for women.