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J Am Dent Assoc, Vol 138, No 1, 94-100.
© 2007 American Dental Association |
TRENDS |
Evidence from California: 1997–2005
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ABSTRACT |
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 TOP ABSTRACT METHODSRESULTSDISCUSSIONCONCLUSIONREFERENCES |
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Methods. This analysis used economic indicators interpreted within an economic framework to investigate trends in labor force numbers and market-determined wages for RDHs and DAs. Rising inflation-adjusted mean wages indicated a labor shortage, while declining inflation-adjusted mean wages indicated a labor surplus.
Results. From 1999 to 2002, the wages for RDHs increased 48 percent and then stabilized, indicating a shortage had occurred, after which the market achieved equilibrium. Wages for DAs increased 13.9 percent from 1997 to 2001, but then declined from 2001 to 2005, indicating a shortage that then became a surplus. The market for DAs may not have stabilized.
Conclusions. Wages increased for RDHs and DAs, suggesting that labor shortages occurred in both markets. The large supply response in the market for DAs resulted in wages declining after their initial rise.
Practice Implications. Tracking the local labor markets for RDHs and DAs will enable dental professionals to respond more efficiently to market signals.
Key Words: Dental hygienists; dental assistants; labor shortage
Abbreviations: BRFSS: Behavioral Risk Factor Surveillance System • CHIS: California Health Interview Survey • COMDA: Committee on Dental Auxiliaries • CPI: Consumer price index • DAs: Dental assistants • RDHs: Registered dental hygienists
In 1999, the American Dental Association’s (ADA) Workforce Needs Assessment Survey found that about two-thirds of private dentists nationwide believed there were an inadequate number of registered dental hygienists (RDHs) and dental assistants (DAs) in their area.1–3 Surveyed dentists believed that the RDH and DA shortage was due to a lack of training programs and graduates from these programs.
An important question is whether the perception of surveyed dentists regarding the existence of a shortage of RDHs and DAs was accurate. In this article, we present a method by which we can use publicly available data to determine the existence of labor shortages for these two groups.
To illustrate this method, we focused on the labor markets for RDHs and DAs in California from 1997 to 2005 and examined whether either profession experienced a labor shortage during this period. We used an economic framework to integrate and interpret statewide economic indicators to understand and compare labor market outcomes for RDHs and DAs. We suggest that fundamental differences in the institutional structure of the supply side of each market likely are responsible for the differing outcomes observed for each profession. Understanding how the labor markets for both of these groups function is important for practicing dentists, RDHs, DAs and policymakers so that each group can respond efficiently to market changes.
The demand for RDHs is derived from the consumer demand for dental services. In other words, the more dental services that consumers demand, the more RDH services that dental practices will demand. Several factors may shift the demand curve, including changes in the preferences of consumers for dental services, changes in the age structure of the population and changes in the ability of consumers to pay for dental services.
For example, the demand for dental services might increase if more consumers decided they prefer to have attractive teeth; if the demographic composition of consumers in a given area shifted toward older people who need more dental care; if the average level of income in an area increased, which allowed more consumers to afford dental care; and/or if more consumers have dental insurance. In these cases, dental practices in turn would tend to demand more RDHs to help provide the increased amount of dental care that consumers demand.
Economic supply.
The second term is "economic supply." For RDHs, this refers to the amount of service that RDHs are willing to provide to dental practices at any given wage rate. The higher the wage rate for RDHs, the more services that RDHs will supply. Factors that will shift the supply curve include changes in training opportunities, as well as changes in alternative opportunities. For example, factors that potentially would increase the supply of RDHs include an increase in the number of RDH training programs or seats within existing training programs. Decreasing mean wages in competing health professions also would increase the supply of people entering the RDH labor market, as this would make the relative mean wages available in the RDH market more attractive.
Labor shortage.
The final term is "labor shortage." The U.S. Department of Labor’s definition states "shortages occur in a market economy when the demand for workers for a particular occupation is greater than the supply of workers who are qualified, available, and willing to do that job."4 A more complete definition would add that workers must be willing to do that job at a given market wage. In the labor market for RDHs, a shortage occurs when the demand for RDHs is greater than the supply of RDHs who are available and willing to work at the prevailing market wage. Rising wages indicate a labor shortage.
The supply and demand for workers can change over time and affect whether there is a labor shortage. For example, if the supply of RDHs remained relatively constant, but demand for them by dental practices increased, there would not be enough RDHs available for all dental practices that wanted to hire a hygienist to do so at the current market wage. The number of RDHs that dental practices wanted to hire then would be larger than the number of available RDHs, resulting in increases in the vacancy rate and average length of time needed to hire an RDH. In response, dental practices would begin to increase their wage offers with the hope that higher wages would make their hygienist positions more desirable.
As the market wage for RDHs rises, however, fewer and fewer dental practices would be willing to pay the increasing wage required to hire a hygienist. The market wage would continue to rise until the number of RDHs that dental practices want to hire is equal to the number of RDHs available. At this point, supply and demand would be in equilibrium and there would be no labor shortage. If there had been no significant growth in the number of RDHs in the labor force during this period, the inflation-adjusted market wage for RDHs would be higher than it was before the labor shortage began.
However, if sufficient growth in the number of RDHs in the labor force did occur after the increase in the market wage, then the market wage would decrease after its initial rise. How much the market wage would decrease depends on how many RDHs entered the labor market.
Thus, the end of a labor shortage is indicated by a stable or declining market wage. If wages are stable, then demand and supply have equilibrated. Declining wages would suggest that the market is in a state of surplus (supply is greater than demand) and still is moving toward equilibrium.
Statistical analysis.
We examined sets of economic indicators over time to determine if their movements were consistent with the patterns expected in an economic shortage. We used two-tailed t tests to determine whether numbers from different years were statistically different from each other at the 95 percent confidence level.
Data sources.
We analyzed several data sets in this study. To determine the basic trends in each labor market, we obtained data regarding the estimated number of workers and mean wages for RDHs and DAs from the Occupational Employment Statistics Survey for the years 1997 to 2005 (wages for 2005 are for the first quarter only).5,6 We obtained the consumer price index (CPI) for 1997 to 2005 from the Bureau of Labor Statistics and used it to adjust wages to constant 2005 dollars.7 We obtained the numbers of candidates passing the hygienist licensing examination each year from 1995 to 2005 from the California Committee on Dental Auxiliaries (COMDA).
To examine the overall utilization of dental services in the state, we obtained data from the Behavioral Risk Factor Surveillance System (BRFSS) survey regarding the use of dental services in California, as measured by the percentage of adults who visited a dentist or dental clinic in the previous 12 months. Data were available for 1995, 1997, 1999 and 2004.8 We obtained data regarding statewide health expenditures for dental services for 1997 to 2004 from the Center for Medicare and Medicaid Services, and we transformed them to a per capita basis using population data from California.9,10 We also adjusted the data using the CPI.
We collected data on factors that may influence the demand for dental services and dental auxiliaries from three sources. Data with regard to per capita income are from the U.S. Bureau of Economic Analysis.11 We collected data regarding the prevalence of dental insurance from the BRFSS for 1995 and from the California Health Interview Survey (CHIS) for 2001 and 2003 (the only known state-specific data available).12 We obtained estimates of the age structure of the California population from the state of California for 1997 to 2005.10
METHODS
TOP
ABSTRACT
METHODS
RESULTS
DISCUSSION
CONCLUSION
REFERENCES
Key terms.
Economic demand.
Three key terms are essential to understanding the economic approach to the labor shortage question. The first term is "economic demand," which is important to distinguish from the concept of "need." For example, for RDHs, the "need" for RDHs would refer to the amount of RDH service required to attain a given goal (for example, cleaning the teeth of all Californians during the next year) without regard to how or how much the RDHs would be paid. In contrast, "economic demand" refers to the amount of RDH service that dental practices are able and willing to pay for at any given wage rate. The lower the wage rate for RDHs, the more RDH services that dental practices will demand. The end of a labor shortage is indicated by a stable or declining market wage.
RESULTS
TOP
ABSTRACT
METHODS
RESULTS
DISCUSSION
CONCLUSION
REFERENCES
Figure 1
shows a rise in inflation-adjusted mean wages for RDHs starting in 1999. Wages peaked in 2002 and were approximately 48 percent higher than their 1999 levels (P = .05). Starting in 2003, inflation-adjusted mean wages leveled off. There was no statistical difference between the wages paid in 2002 and those paid in successive years. This indicates a period of labor shortage from 1999 to 2002, after which the market regained equilibrium.
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, an increasing number of candidates per 100,000 population passed the hygienist licensing examination in California beginning in 1998, and the number peaked in 2002.13 However, these increases were small relative to the overall size of the labor force and did not result in a statistically significant difference in the employment numbers for RDHs (compare Table 1 with Figure 2, page 98). Figure 2 presents population-adjusted employment estimates for active RDHs. The estimated annual numbers of active RDHs during the entire period from 1997 to 2004 were not statistically different from each other regardless of which years are compared.
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shows that the inflation-adjusted mean wages for DAs increased by 13.9 percent between 1997 and 2001 (the peak year) (P = .05). Inflation-adjusted mean wages dropped from their peak in 2001 relative to the end of the series in 2005 (P = .05). This indicates a period of labor shortage from 1997 to 2001, followed by a period of labor surplus from 2001 to 2005. Consistent with this finding, Figure 2 shows that the number of population-adjusted DAs increased by 28 percent from 1997 until 2003 (the peak year) (P = .05). The population-adjusted numbers of DAs were not statistically different between 2001 and 2004.
Utilization of dental services.
We can approximate the utilization of dental services by determining the percentage of adults who visited a dentist or dental clinic in the previous 12 months. However, this measure does not allow us to determine whether hygienists and/or dentists performed the services that patients received during their visit. Table 2 shows that an increase in the utilization of dental services in California started in about 1997 and continued through 2004.14 The 1999 prevalence estimate is larger than the 1997 prevalence estimate (P = .05), and the 2004 estimate is larger than the 1999 estimate (P = .05), indicating that the demand for dental services increased over time. The increase between 1997 and 2004 was 11.2 percent, a fairly large increase, and this increase accounts only for adults aged 18 through 65 years. This is equivalent to a change of 7.1 percentage points from 1997 to 2004. In other words, approximately 4.6 million more adults in California received dental care in 2004 than in 1997.10
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Likely factors behind an increase in the demand for dental services include changes in the prevalence of dental insurance coverage, changes in per capita income and changes in the age structure of the population. Dental insurance coverage, documented to be associated positively with dental visits,15,16 increased during the nearest comparable period for which data were available (1995 to 2003). In 1995, only 56.3 percent of the adult population in California had dental insurance, according to BRFSS data.14 However, by 2001, 68.5 percent of the adult population was covered according to CHIS data, an increase of 21.7 percent from 1995 (P = .05). CHIS data showed that this level dropped only 2 percentage points between 2001 and 2003 (P = .05). Inflation-adjusted per capita income (in 2005 dollars) rose 14.2 percent from 1997 to 2000, peaked in 2000 and dropped only 2 percent from 2000 to 2005. In addition, the percentage of the population 55 years and older rose approximately 2 percentage points from 1997 to 2004.
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DISCUSSION |
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TOPABSTRACTMETHODSRESULTSDISCUSSIONCONCLUSIONREFERENCES |
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There was no statistically significant change in the population-adjusted number of RDHs during any portion of this period. The increase in the number of hygienists passing the licensing examination was too small to have a statistically significant impact on the supply of RDHs (compare Figure 2 with Table 1). In addition, while some RDHs are not in the RDH labor force (it is not known with accuracy how many RDHs are not working as hygienists), the number of inactive RDHs who may have entered the RDH labor force as a result of the rise in inflation-adjusted mean wages did not cause a statistically detectable increase in the size of the RDH labor force.
In the labor market for DAs, inflation-adjusted mean wages rose from 1997 to 2001, also an indication of a labor shortage during this time. Inflation-adjusted mean wages peaked in 2001 and decreased from 2001 to 2005, indicating that the market for DAs was in surplus during this period. The population-adjusted number of DAs also increased from 1997 to 2001, suggesting that the labor shortage was due to an increase in demand and that the supply side of the labor market for DAs was not constrained, but responded strongly.
Increase in demand. The increase in the demand for RDHs and DAs likely was due to a number of factors. Because dentists’ demand for RDHs and DAs is a derived demand, dependent on consumer demand for dental services, we would expect the population-adjusted number of dental visits, as well as overall dental expenditures per capita, to rise during this period. We found that the percentage of the population who visited a dentist increased from 1997 to 2004 and that dental expenditures per capita increased from 1997 to 2004. These observed increases in utilization and expenditures likely were the result of increases in the level of dental insurance coverage in the population, as well as increases in inflation-adjusted per capita income and an increase in the percentage of the population 55 years and older, a group that tends to need more dental care.
To determine whether the changes in the labor market for RDHs and DAs were simply a reflection of larger market forces in health care labor markets, we also examined inflation-adjusted mean wages for "Healthcare Practitioners and Technical Occupations" in the "Occupational Employment Statistics" survey.6 This general category includes dentists, hygienists and people in most health care occupations. We found a gradual rise in inflation-adjusted mean wages of 13 percent from 1999 to 2002 and an additional rise of 3.6 percent from 2002 to 2005, suggesting a continuing shortage in this aggregate category. Thus, the labor market conditions for both RDHs and DAs differed from those of this aggregate category.
In summary, the labor markets for RDHs and DAs behaved differently from each other during the period from 1997 to 2005. Labor shortages occurred in the labor markets for both professions. However, the supply response in each labor market differed substantially, resulting in differing outcomes.
Differing supply responses. The reasons for the differing supply responses in the RDH and DA labor markets likely were due in part to the following factors: differing training periods required by each profession, the number of slots available to train each type of professional and the responsiveness of these two aspects of training to the conditions of the labor market. RDHs must be licensed by the state of California. To take the licensing examination, candidates must have graduated from an ADA-accredited dental hygiene program, which typically is at least two years long; completed approved courses in soft-tissue curettage, administration of nitrous oxide and administration of local anesthetic; and passed the national written examination. They then must pass a clinical examination and examinations in ethics and California law administered by COMDA.13
Thus, the supply of RDHs is constrained by the number of seats available in accredited dental hygiene programs and the time it takes to complete the required course of study. Decisions to change either the time required to complete the course of study or the number of training slots are not made by individual dental practices or the people who wish to become RDHs. In other words, these decisions are not made by the direct participants in the labor market for RDHs.
In contrast, DAs can be trained on the job or in dental assisting programs offered by community colleges, technical institutes or the U.S. Armed Forces.17 On-the-job training can commence at any time and has no set length of time, while academic programs typically are nine to 11 months in duration. Although many DAs do become certified, many do not, as there is no legal requirement that DAs complete an accredited training program or become certified.1 Thus, there is no practical supply constraint on the number of DAs who can be trained, either in terms of a uniform length of time required to complete training or the total number of training slots that are available from all sources.
Changes in the average length of time required to complete training and changes in the total number of training slots are influenced significantly by the actions of dental practices offering training. In other words, the direct participants in the labor market for DAs can affect supply.
The evidence from California suggests that the labor markets for RDHs and DAs behave very much as predicted by economic theory. The RDH labor market is institutionally constrained on the supply side in its ability to respond to changes in demand; as a result, it responds to these changes with increases in wages. In contrast, the DA labor market is not constrained on the supply side and responds to changes in demand with increases in wages, followed by a rapid entry of new DAs into the market, resulting in decreasing wages.
Study limitations. Limitations to this study include the lack of available data with regard to the movement of RDHs or DAs between part-time and full-time work (however, there was no statistical difference between the wages paid to part-time RDHs and those paid to full-time RDHs in 2003)18; technological changes to dental practice; and changes in consumer preferences for dental services.
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FOOTNOTES |
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