The data on the cost of non-boarding primary and secondary education were obtained from one non-profit religious mission school in Nairobi, Kenya. The public primary and secondary schools are heavily subsidized. For example, in 2003, Kenya decided to implement a free primary education policy in the entire country. Thus, use of fees charged in public schools would grossly underestimate the value of investment made by governments and society in general. The religious mission schools levy fees just enough to cover fixed and variable costs, earning neither a profit nor making a loss. At the other extreme are the private-for-profit schools that aim at making super-normal profits. The latter schools distort the resource allocation process because they reflect the overpricing of education production process. Therefore, among the three categories of schools, the fees charged by religious schools in Kenya were thought to be a closer reflection of the cost of primary and secondary education.
The primary school period is for eight years; and the secondary school is for four years. Their cost consists of tuition, lunch, transport, textbooks, stationery and uniforms. The tuition, lunch and transport fees levied by the mission schools aimed at covering the cost, not making a profit.
The data used to estimate the cost of training nurses and doctors were obtained from the University of Nairobi (the oldest national university in Kenya) medical school and its college of health sciences self-sponsored (unsubsidised) programmes. The other public university in Kenya that trains medical doctors and nurses is the Moi University. The two universities charge equal fees for training of doctors and nurses. The fees for government-sponsored students are heavily subsidized, whereas the self-sponsored students pay fees that are equal to the cost of education. Although the private universities do not train medical doctors, some of them (e.g. Methodist University and University of Eastern Africa) do train nurses. We used the fees for self-sponsored medical and nursing students in public universities as a proxy for the unsubsidised cost of tertiary education.
The nursing programme is made up of four years of training and one year of internship. The medical doctor programme consists of five years of training and one year of internship. The cost estimates were made up of unsubsidised tuition fees, accommodation and living expenses. The statistics on the number of Kenyan nurses working in OECD countries were obtained from the World Health Report 2006 [7
]. The number of Kenyan doctors emigrating to various developed countries were obtained from Stilwell et al
To obtain the average total cost of producing a doctor (nurse) we summed up the average cost of medical school (and nursing school) and the average costs of primary and secondary schools. That gave us an approximation of the total cost of training a medical doctor and a nurse.
To obtain the returns from investment foregone by society when a doctor or a nurse emigrates, we multiplied the average total cost of educating a health professional by a compounding factor [8
]. In algebraic terms, the lost return from education investment into an ith
doctor or nurse (ILOSSi = Doctor, nurse
) who decides to emigrate would be:
ILOSSi = Doctor, nurse = ATCi,.. × (1 + r)t
Where: ATCi,.. = average total cost of educating a ith health professional, e.g. doctor, nurse; (1 + r)t is the compounding factor; 'r' is the interest rate; and 't' is the difference between the average retirement age and the average age at emigration. The above formula gives the accumulated value or future value of the investment made into producing a doctor or nurse in 't' years.
The Commercial Bank of Africa has a fixed deposit interest rate (r) of 6% and a mortgage rate of 16%; the East African Building Society has a fixed deposit interest rate of 8.5% and a mortgage rate of 16%; the Standard Chartered Bank has a fixed deposit interest rate of 7.2% and a mortgage rate of 16.5%; the Stanbic Bank has a fixed deposit interest rate of 5% and a mortgage rate of 14.5%; the National Bank has a fixed deposit interest rate of 6.2% and does not have a mortgage service; and the Commercial Bank of Kenya has a fixed deposit interest rate of 7.0% and a mortgage rate of 15%. The average fixed deposit interest rate is 6.65% per year. The average mortgage interest rate is 15.64% per year. The fixed deposit interest rates and the mortgage rates were obtained from the banks mentioned above by one of the authors (LHM) through face-to-face interviews with the respective customer services managers.
The past studies have attempted to estimate the cost of brain drain by taking into account only the tertiary cost and disregarding the primary and secondary school investments. We believe that this leads to underestimation of the loss of returns from investments into human resources for health that emigrate. This study takes into account the total cost of educating a health professional to be the sum of the cost of primary, secondary and tertiary education. In order to get the total future value of this investment that is lost due to brain drain, we applied the above-mentioned compounding formula to estimate the cumulative loss of future returns.