. This report assesses the input of labour required to satisfy the demand for public HC services in Norway towards 2060. The employment share of public HC is already as large as 13 percent (2019). Realistic projections are important for planning the capacity in the HC sector, and this report has been carried out as an assignment for the government appointed Health Personal Commission.
The projections are based on a well-known methodology, that emphasizes the age dependency in the demand for 14 different HC services. The population is divided into groups defined by gender and age. The demand for each service from each population group is computed as the product of i) man years per user (reflecting service quality and productivity); ii) users per person; iii) number of persons. The ratios in (i) and (ii) are estimated based on individual 2019-data from administrative registers. We rely on the “main alternative” in the population projections published in 2022 by Statistics Norway.
We calculate several scenarios of the labour requirements in each of the specified public HC services, differing with respect to assumptions on i) the health status of the elderly, ii) the number of man years per user, and iii) unpaid care supplied by family members. Our base line scenario combines the main alternative in the population projections with declining user ratios due to health improvements in tandem with the projected fall in mortality among the elderly, as well as a 0.5 percent growth in the labour/user ratio each year due to quality and productivity improvements.
In several scenarios, growing HC demand implies that the employment share of public HC in 2060 will be twice the present 13 percent. Even a rise to nearly 40 percent is consistent with plausible assumptions about the main driving forces. In particular, the demand for long-term care is likely to grow strongly. Maintaining the present employment share is impossible without pronounced breaks from historical trends. For example, we show that such a development requires a combination of i) 0.5 percent cut in man years per user in every all HC service in every year, without quantity or quality reductions; ii) a proportional growth in unpaid care and government long-term care; iii) gradual health improvements among the elderly in line with the decline in age specific mortality rates.
We compare the projected growth in public HC employment with the corresponding growth since 1973 for the public Specialist health services (somatics, rehabilitation, psychiatry, substance abuse treatment) and public Care services (home help and institutionalized), where consistent data are available. In 2019, employment in the Specialist health services was 2.9 times the corresponding 1973-level, which implies an annual average growth of 2.3 percent. The expansion of Care services has been even stronger: An average growth of 3.7 percent has raised employment here to 5.4 times 1973 levels. By comparison, total employment grew by 1.1 percent over the same period.
A decomposition shows that demographic changes account for 53 percent of observed employment growth in the aggregate of Specialist health and Care services. The contribution from aggregate population growth was twice as large as the contribution from changes in the age composition. The residual 47 percent of the observed growth includes the effects of standard improvements and increased coverage.
Health improvements and new welfare technology are often touted as factors that will mitigate the future growth in HC employment. However, these factors must have been active also in the past decades. Thus, they must have been dominated by forces working in the opposite direction. The concrete content of such forces is still unsettled.
A reallocation of resources in favour of public HC is often regarded as problematic due to fiscal costs and problems attracting sufficient labour. However, a socially efficient economy is characterized by flexible supply side adjustments to changes in aggregate willingness to pay for different goods. Ageing and further growth in material living standards from the exceptionally high Norwegian levels, may imply that further growth in the public HC employment share will be a part of a socially efficient growth path.