The Role of Wages and Per Capita Health Expenditure on the Migration of Health Care Workers from Developing Countries

Topics: Health care, Healthcare, Health care provider Pages: 25 (8099 words) Published: August 23, 2013
An increasing amount of OECD countries are becoming reliant on immigration as a means of dealing with shortages of health care professionals. The affect of out-migration, especially in the continent of Africa where resources are extremely low, is becoming more concerning. This paper will examine the role of wages and per capita health expenditure in the migration decision and discuss the effects of changes in both variables on the density of health care professionals. We will also discuss the supply-side can do to limit the out-migration of physicians and nurses. This paper will use wage and health expenditure differentials in the health care sector between source and destination countries (adjusted for PPP) to test the hypothesis that higher wages and health expenditure per capita lead to a larger density of health care professionals in a given country. Data is also presented on other important factors affecting migration. There exists a surprisingly lower correlation between wages and density than with per capita health expenditure and density. This is the direct implication of the wage differentials between developing and OECD countries being so large that a small increase in wages in the native country are not likely to affect the decision of the health care worker.

1.0 Introduction
According to the WHO (2011) there are currently 60 million health workers worldwide, a density of 86 per 10,000 people. The WHO (2010) defines health workers as ones currently in employment, which excludes émigrés who no longer practice their profession. Health workers are considered as individuals whose intentions are to enhance the health of another person or of a system. They include professions such as doctors, nurses, pharmacists, and laboratory technicians. Support workers, volunteers and management roles such as hospital managers, financial officers, cooks, drivers and cleaners are also included.

In 2000, according to a study by the United Nations, 175 million people (est) or 2.9% of the global population were known to have been living outside their country of birth for longer than a year. These people are known as International Migrants. Of this number, 65 million are believed to be economically active1 (UN, 2001). In absolute terms, the stock of migrant population2 has increased by 0.3% from 2.3% to 2.9% during the years 1965 – 2000.

When studying the effects of migration, it is important to consider both the positive and negative effects. Particularly for migrants who move from developing countries with the opportunity of securing better job, being offered higher wages abroad, remittances are an example of migration yielding positive externalities. Remittances provide income streams to many developing countries in need of foreign exchange. In these developing countries, remittances often provide a larger fraction of foreign exchange than foreign investment, international trade and foreign aid. Turnell et al. discovered that in 2006, remittances made by an estimated 150 million migrants worldwide totalled around $300 billion (US) in the same year where the sum total of foreign direct investment, aid and international trade in developing countries was $270 billion (US). However, in cases where situations such as brain drain exist, migration also acts towards precluding economic and societal development.

Stilwell et al. (2003) noted that one of the largest issues with increasing out-migration from developing countries is the loss of educated professionals to richer countries. His paper on developing ethical policies on the migration of health workers found that 65% of all economically active migrants who have migrated to developed countries are classed as “highly-skilled”. In order to be classified as a highly skilled professional, an individual is expected to have completed education up to a tertiary level. In the health sector workforce, this includes pharmacists, dentists, nurses and physicians. This...

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