Health sector employment growth calls for improvements in labor productivity

•Job growth in the health and social care sector is strong.•Labor productivity of a growing health work force needs more attention.•International standards to measure labor productivity are required.•Empirical evidence indicates that policy measures may well be effective in the labor intensive service sector, like in health and social care.•Care delivery models need improvement to permit enhanced labor productivity.

While rising costs of healthcare have put increased fiscal pressure on public finance, job growth in the health sector has had a stabilizing force on overall employment levels – not least in times of economic crises.In 2014 EU-15 countries employed 21 million people in the health and social care sector. Between 2000 and 2014 the share of employed persons in this sector rose from 9.5% to 12.5% of the total labor force in EU-15 countries. Over time labor input growth has shifted towards residential care activities and social work while labor in human health activities including hospitals and ambulatory care still comprises the major share. About half of the human health labor force works in hospital. Variation of health and social care employment is large even in countries with generally comparable institutional structures. While standard measures of productivity in health and social care are not yet comparable across countries, we argue that labor productivity of a growing health work force needs more attention. The long-term stability of the health system will require care delivery models that better utilize a growing health work force in concert with smart investments in digital infrastructure to support this transition. In light of this, more research is needed to explain variations in health and social care labor endowments, to identify effective policy measures of labor productivity enhancement including enhanced efforts to develop comparable productivity indicators in these areas.