Second, while past studies have focused on individual characteristics such as rural background, education, age, and gender, they have not addressed the role of individual motivation and personal norms. Yet, different strands of the literature indicate that such factors may have an important effect on career choice. Deci (1975) was one of the first to recognize the role of professional commitment, or intrinsic motivation, while Dixit (1997; 2001) and Wilson (1989) emphasize its role in organizations and its importance for public service delivery. Benabou and Tirole also attribute a central role to intrinsic motivation and contrast it with motivation triggered by extrinsic incentives.<sup>5</sup> Studies applied to the health sector also underline the importance of worker motivation . In recognition of these findings, we will analyze and discuss the effect of individual motivation on the willingness to work in a rural area.

The remainder of the paper is organized as follows. Section 2 presents the basic characteristics of the data, how we collected the contingent valuation data and details of the survey. Section 3 discusses the econometric strategy, while section 4 reports the results. In section 5 we discuss the policy implications and carry out a simulation exercise. Section 6 concludes.

# **2. The Ethiopian Context and the Cohort Survey**

The cohort survey was implemented in Ethiopia, a country with some of the worst health outcomes in the world.<sup>6</sup> With the majority of the population living in rural areas , and with substantial urban-rural disparities in living standards - the Household Income and Expenditure Survey (2000) indicates that average annual household expenditure in urban areas is almost twice that in rural areas (CSA & ORC Macro, 2001) - the health challenges are particularly severe in the rural areas. Endeavours to meet these challenges are hampered by the limited nature of health resources. Public spending is very low: in a recent report per capita health expenditures are estimated at around 4 USD or 25 USD PPP, which is significantly lower than the Sub-Sahara Africa average of 42 USD or 89 USD PPP.<sup>7</sup> Moreover, Ethiopia not only has a very low number of health workers per capita - on average 11 nurses and 2 physcians per 100,000 inhabitants, which is low even

> 5 They define intrinsic motivation as the desire to perform a task for its own sake, while extrinsic motivation refers to rewards that are contingent on behaviour or outcomes. Their work can be seen as a refinement of Kreps (1997), who suggested that in many cases what is referred to as intrinsic incentives may in fact be workers’ response fuzzy extrinsic motivators, such as fears of discharge, although he also acknowledged an important role for ‘genuine’ intrinsic motivation

> 6 Respiratory infection, diarrhea, malnutrition, and malaria contribute to high levels of infant and child mortality (estimated at 113 and 171 respectively for 2002, below regional averages for Sub-Saharan Africa) (UNICEF, 2003). Limited access to family planning and maternity care, as well as poor quality of these services also contribute to high levels of maternal mortality. For a detailed discussion of health outcomes and the Ethiopian health system more broadly, see World Bank .

> 7 This is the estimated average for the 1990s World Bank (2004).

4