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The aim of this publication is to examine how labor and health economics can be used to analyse and better understand the role and functions of health worker labor markets. Health workforce shortages stem not only from inadequate overall supply, but also from suboptimal allocation of health human resources by location and role. Low performance and productivity are also issues. These three problems are often compounded by a resource problem - the gap between the finances required for an adequate workforce and those likely available. The application of labor economics to health care labor markets needs to account for the specific institutional features and market failures in health care.

The publication is organised as follows: the first section gives an introduction; the second section sets out a broad framework that needs to be used when examining health care labor markets; the third section summarises the key issues surrounding the demand and supply of health workers and how these interact in the health worker labor market; the fourth section summarises the broad analytical approaches used in economics, focusing on issues of causality and labor market dynamics; and the final section suggests some gaps in research and analysis for health worker labor markets in low- and middle-income countries (LMICs).

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Background: The capacity for high-income countries to supply enough locally trained doctors to minimise their reliance on overseas-trained doctors (OTDs) is important for equitable global workforce distribution. However, the ability to achieve self-sufficiency of individual countries is poorly evaluated. This review draws on a decade of research evidence and applies additional stratified analyses from a unique longitudinal medical workforce research program (the Medicine in Australia: Balancing Employment and Life survey (MABEL)) to explore Australia's rural medical workforce self-sufficiency and inform rural workforce planning. Australia is a country with a strong medical education system and extensive rural workforce policies, including a requirement that newly arrived OTDs work up to 10 years in underserved, mostly rural, communities to access reimbursement for clinical services through Australia's universal health insurance scheme, called Medicare.

Findings: Despite increases in the number of Australian-trained doctors, more than doubling since the late 1990s, recent locally trained graduates are less likely to work either as general practitioners (GPs) or in rural communities compared to local graduates of the 1970s-1980s. The proportion of OTDs among rural GPs and other medical specialists increases for each cohort of doctors entering the medical workforce since the 1970, peaking for entrants in 2005-2009. Rural self-sufficiency will be enhanced with policies of selecting rural-origin students, increasing the balance of generalist doctors, enhancing opportunities for remaining in rural areas for training, ensuring sustainable rural working conditions and using innovative service models. However, these policies need to be strongly integrated across the long medical workforce training pathway for successful rural workforce supply and distribution outcomes by locally trained doctors. Meanwhile, OTDs substantially continue to underpin Australia's rural medical service capacity. The training pathways and social support for OTDs in rural areas is critical given their ongoing contribution to Australia's rural medical workforce. Conclusion: It is essential for Australia to monitor its ongoing reliance on OTDs in rural areas and be considerate of the potential impact on global workforce distribution.

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The National Health Workforce Planning and Research Collaboration (NHWPRC) was established by the former National Health Workforce Taskforce (NHWT) to undertake national health workforce research over a three-year period, including advice and development on future supply and demand models for the health workforce. This report discusses enhancements for forecasting methods as well as alternative methodologies for workforce planning, including different approaches to modelling demand. Alternative approaches explored in this study include: (1) competency-based planning, which is based on the tasks that 'should' be undertaken by specific health professionals and which they are competent and trained to provide, given the current and expected demands placed upon them; (2) needs-based approaches, which include the current approach of defining demand (need) based on utilisation of health expenditures, but also includes approaches using more direct measures of need using epidemiological or burden of disease data; (3) service-based planning, which specifies what types of health care services should be provided for a given level of demand or need, and then what type of workforce would be required to prove the specified services; and (4) economic approaches, which include the econometric estimation of demand and supply, including investigating the issue of attempting to control for the effect of supply on demand, and also modelling the expected additional costs and benefits of increasing the supply of health professionals. Show less

The rate at which individuals leave the workforce can be called an 'exit rate'. Workforce exits can be temporary, such as time out to raise a family or extended periods of leave; or permanent, such as retirements, deaths or career changes. Understanding exit rates is an integral part of workforce planning and exit rates are a key input in the supply and demand modelling of Health Workforce 2025. This study was commissioned as a technical report to validate the exit rates used in Health Workforce 2025, by examining temporary and permanent exits among a sample of doctors and nurses using an alternative data source.

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