28 | A Labor Market Assessment of Nurses and Physicians in Saudi Arabia
In a different scenario with robust economic growth, represented by D2 in figure 2.1, the demand for health workers may exceed both the supply and the need, suggesting that the economy will likely be able to employ health workers above and beyond the service utilization and coverage targets; however, there will not be enough health workers produced by 2030 to fulfill total need. This situation suggests that additional policy remedies should focus on some combination of increasing the inflows of health workers into the health sector, retaining those already employed, and increasing the efficiency and productivity of existing health workers (for example, through technological innovation). The steps for projecting health worker supply, need, and demand are detailed in the following sections. It is important to note that demand and supply are endogenously related in the labor market (that is, they simultaneously affect each other). However, different methods were used to project each in an effort to address this potential endogeneity. Specifically, a growth projection model used for supply was based solely on an exogenous time trend and no other factors (see the next section). Furthermore, all parameter inputs into the demand model are lagged to ensure the direction of causality (see the section on demand projections).
SUPPLY PROJECTIONS Data inputs Following methods used in the past (Bruckner, Liu, and Scheffler 2016; Liu et al. 2017; Scheffler et al. 2008), projecting the future supply of health workers critically relies on having historical data on the number of health workers per population (for example, since 2000 or as far back in time as possible). Regardless of the specific modeling approach, projecting supply rests on the assumption that the production of future health workers will continue as in the past without any policy adjustments (that is, a baseline scenario). In other words, health worker supply growth is exogenous, and trends only with time following historic patterns. It assumes that migration, entry into the health professions, and retirement and deaths of health workers will all remain constant in the future; changes in these factors can be analyzed in simulations performed on the base model. If projections for separate occupational groups (for example, general practitioners, nurses) or immigration status are desired, these data should also be disaggregated along these dimensions. If such data are available at the governorate level, the empirical analysis will produce governorate-level projections. However, using individual governorate-level projections to set health worker targets is strongly discouraged because of the inherent uncertainty of statistical models. Rather, aggregating estimates to a higher level (for example, regional) will provide more reliable estimates of the general and relative magnitudes of health workers across these units, which can then inform health worker planning.
Statistical approach Model specification
Various econometric approaches can be used to project supply numbers, each with advantages and disadvantages, as described in table 2.1. All models assume
