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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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Many countries face a continuing shortage in nurses' labour supply. Previous research suggests that nurses respond only weakly to changes in wages. However, the decision to exit or enter the nursing profession has not been taken into account in previous studies, although the occupational choice may be more responsive to wages than the labour supply decision at the intensive margin. We estimate a multi-sector model of nursing qualification holders' labour supply in different occupations. A structural approach allows us to model the labour force participation decision, the occupational and shift-type choice, and the decision about hours worked as a joint outcome following from maximizing a utility function. Disutility from work is allowed to vary by occupation and also by shift type in the utility function. Furthermore, we allow the preference parameters in the utility function to vary by certain family characteristics and personality. This may be important because the high incidence of shift work, potentially impeding the balance of work and family life, and the high level of emotional and personal involvement required in the profession suggest that the labour supply of nurses might depend on their personality and their family circumstances. Our results suggest that average wage elasticities might be higher than previous research has found. This is mainly due to the effect of wages on the decision to enter or exit the profession, which was not included in the previous literature, rather than from its effect on increased working hours for those who already work in the profession. We find that the negative labour supply elasticities with respect to income are higher for nurses with children, while the positive elasticities with respect to wages are higher for low-qualified, older and childless nurses. Elasticities do not appear to vary by personality trait.

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Using data from a new longitudinal survey of doctors from Australia, the authors test whether observed large gender-pay gaps among general practitioners (GPs) are the result of women's larger willingness to interrupt their careers. On average, female GPs earn [AUD] 83,000 or 54 per cent less than male GPs. The difference between men and women with children is [AUD] 105,000, and [AUD] 45,000 for men and women without children. Of this gap, 66-75 per cent is explained by differences in observable characteristics such as hours worked. The family gap emerges also within the sexes. Female GPs with children experience an earnings penalty of [AUD] 15,000-[AUD] 25,000 in comparison to women without children; almost 100 per cent of this difference is due to observable characteristics such as hours worked and career interruptions. Male GPs with children experience a family premium of [AUD] 35,000 in comparison to men without children, indicating the presence of a breadwinner effect that exacerbates the gender-earnings gap.

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A longstanding but complex health policy issue has been to ensure people in rural Australia have good access to medical care. In the context of a reported national oversupply of doctors, policies to redistribute doctors to areas of undersupply are of particular relevance. This policy brief summarises key evidence from the [Medicine in Australia: Balancing Employment and Life] MABEL survey in relation to supporting the rural medical workforce. [This] evidence shows that a range of factors throughout the medical training pipeline and the course of doctors' work influences the supply of doctors in rural areas.

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A number of studies suggest there is an over-supply of specialists and an under-supply of [general practitioners] GPs in many developed countries. Previous econometric studies of specialty choice from the US suggest that a number of factors play a role, including expected future earnings, educational debt, and having predictable working hours. Given endogeneity issues in revealed preference studies, a stated-preference approach is warranted. This paper presents results from a discrete-choice experiment completed by a sample of 532 junior doctors in 2008 before they choose a specialty training program. This was conducted as part of the first wave of the MABEL (Medicine in Australia: Balancing Employment and Life) longitudinal survey of doctors. [The authors] include key job attributes such as future earnings and hours worked, but also allow the choice to be influenced by academic research opportunities, continuity of care and the amount of procedural work. Interactions of attributes with doctor characteristics, including gender, educational debt, and personality traits are also examined. [The authors] find the income/working hours trade-offs estimated from [the] discrete choice model are close to the actual wages of senior specialists, but much higher than those of senior GPs. In a policy simulation [the authors] find that increasing GPs' earnings by $50,000, and increasing opportunities for procedural or academic work can increase the number of junior doctors choosing general practice by between eight and 16 percentage points, approximately 212 to 376 junior doctors per year. The results can inform policymakers looking to address unbalanced supply of doctors across specialties.

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A key policy issue in many countries is the maldistribution of doctors across geographic areas, which has important effects on equity of access and health care costs. Many government programs and incentive schemes have been established to encourage doctors to practise in rural areas. However, there is little robust evidence of the effectiveness of such incentive schemes. The aim of this study is to examine the preferences of general practitioners (GPs) for rural location using a discrete choice experiment. This is used to estimate the probabilities of moving to a rural area, and the size of financial incentives GPs would require to move there. GPs were asked to choose between two job options or to stay at their current job as part of the Medicine in Australia: Balancing Employment and Life (MABEL) longitudinal survey of doctors. [A total of] 3,727 GPs completed the experiment. Sixty five per cent of GPs chose to stay where they were in all choices presented to them. Moving to an inland town with less than 5,000 population and reasonable levels of other job characteristics would require incentives equivalent to 64 per cent of current average annual personal earnings ($116,000). Moving to a town with a population between 5,000 and 20,000 people would require incentives of at least 37 per cent of current annual earnings, around $68,000. The size of incentives depend not only on the area but also on the characteristics of the job. The least attractive rural job package would require incentives of at least 130 per cent of annual earnings, around $237,000.

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