Ebook: Incentives and Dynamics in the Ethiopian Health Worker Labor Market

By international standards, the supply of health workers in Ethiopia is tiny. In addition, those who do enter the profession and remain in the country disproportionately live and work in the capital, Addis Ababa. This story is repeated across the developing world, and in particular in sub-Saharan Africa, where shortages of health workers are deemed chronic. Increasing the supply of health workers, and improving their geographic distribution, requires an understanding of their responsiveness to changes in the incentives and constraints they face, and the efficacy with which labor markets can be expected to allocate scare human resources for health (HRH). This book presents evidence on these and other HRH issues from a new survey of Ethiopian health workers. The detailed data we collected from nearly 1,000 health workers allows us to answer three sets of questions: (i) how do compensation levels vary with location, training, experience, etc.?; (ii) what kinds of incentive packages are potentially most effective in attracting workers to under-served rural areas?; and (iii) what can we learn about the health worker labor market from one of its unique institutional features, that is, that new graduates are assigned to their first jobs via a lottery? We first use this random assignment to evaluate the longer-term impacts of working in a rural area early on in a worker’s career – is being sent to the end of the earth the end of the world? (answer: no), and second, we evaluate the long term efficiency effects of the lottery, which tends to obscure information about health worker quality, thereby leading to adverse selection – do high quality lottery participants quit the profession, thereby contributing to the medical brain drain? (answer: yes). The policy issues we can address with these data are broader in scope and more detailed in execution than most of the extant empirical work on HRH in developing countries. The book is thus suitable for researchers and policy analysts with an interest in understanding and improving the allocation of human resources for health in the developing world.