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Measuring and Analyzing Salaries and Incentives
Figure 9.1 Common Forms of Individual Incentives and Compensation for Public Sector Health Workers in Low-Income Countries Utility
Status or intrinsic motivation
Noncash benefits (formal/official)
Compensation
Time
Cash income (formal/official)
Informal/unofficial compensation
Forms
Forms
Forms
• Housing • Transportation • Education • Seniority/civil service rank • Other noncash benefits
• Salary or wages • Bonus • Cash allowances • User fee shares • Pensions (future income)
• Salary or wages from “moonlighting” • Sales of medical goods (e.g., pharmaceuticals) • Extra informal payment for services • Other forms of informal compensation
In the government sector, a first—and essential—benchmark is the income earned by comparable health workers (those who have the same education and experience) in the private sector. Data on the income earned through moonlighting strongly suggest that government health workers strive to earn moonlighting income so that their total income (official income plus moonlighting income) will match the income of private health workers.2 For instance, a recent survey in Cambodia found that “total public sector income for experienced doctors and specialists (including incentives and dual practice) is essentially equal to private sector compensation” (World Bank 2013). Similar patterns have been observed in several other LICs. Having some estimates of income earned by private health workers is therefore essential for assessing the adequacy of government compensation levels. This private sector income benchmark has an important implication. It is likely that health workers do not want to work in rural areas not only because the cost of living there can be higher,3 but also because the opportunities for dual practice (that is, the chance to earn additional income by moonlighting) are much scarcer. Indeed, it appears that the fewer opportunities health workers Health Labor Market Analyses in Low- and Middle-Income Countries http://dx.doi.org/10.1596/978-1-4648-0931-6