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Nurses wanted: Is the job too harsh or is the wage too low?

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  • Di Tommaso, M.L.
  • Strøm, S.
  • Sæther, E.M.

Abstract

When entering the job market, nurses choose among different kind of jobs. Each of these jobs is characterized by wage, sector (primary care or hospital) and shift (daytime work or shift). This paper estimates a multi-sector-job-type random utility model of labor supply on data for Norwegian registered nurses (RNs) in 2000. The empirical model implies that labor supply is rather inelastic; 10% increase in the wage rates for all nurses is estimated to yield 3.3% increase in overall labor supply. This modest response shadows for much stronger inter-job-type responses. Our approach differs from previous studies in two ways: First, to our knowledge, it is the first time that a model of labor supply for nurses is estimated taking explicitly into account the choices that RN's have regarding work place and type of job. Second, it differs from previous studies with respect to the measurement of the compensations for different types of work. So far, it has been focused on wage differentials. But there are more attributes of a job than the wage. Based on the estimated random utility model we therefore calculate the expected value of compensation that makes a utility maximizing agent indifferent between types of jobs, here between shift work and daytime work. It turns out that Norwegian nurses working shifts may be willing to work shift relative to daytime work for a lower wage than the current one.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Health Economics.

Volume (Year): 28 (2009)
Issue (Month): 3 (May)
Pages: 748-757

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Handle: RePEc:eee:jhecon:v:28:y:2009:i:3:p:748-757

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Web page: http://www.elsevier.com/locate/inca/505560

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Keywords: Nurse labor supply Multi-sector Shift-work;

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References

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  1. Roed, Knut & Strom, Steinar, 2002. " Progressive Taxes and the Labour Market: Is the Trade-Off between Equality and Efficiency Inevitable?," Journal of Economic Surveys, Wiley Blackwell, vol. 16(1), pages 77-110, February.
  2. John Creedy & Guyonne Kalb, 2003. "Discrete Hours Labour Supply Modelling: Specification, Estimation and Simulation," Melbourne Institute Working Paper Series wp2003n16, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
  3. Steinar Str�m & John K. Dagsvik, 2006. "Sectoral labour supply, choice restrictions and functional form," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 21(6), pages 803-826.
  4. Elliott, Robert F. & Ma, Ada H.Y. & Scott, Anthony & Bell, David & Roberts, Elizabeth, 2007. "Geographically differentiated pay in the labour market for nurses," Journal of Health Economics, Elsevier, vol. 26(1), pages 190-212, January.
  5. John K. Dagsvik & Marilena Locatelli & Steinar Strøm, 2006. "Simulating labor supply behavior when workers have preferences for job opportunities and face nonlinear budget constraints," Discussion Papers 488, Research Department of Statistics Norway.
  6. Phillips, V. L., 1995. "Nurses' labor supply: Participation, hours of work, and discontinuities in the supply function," Journal of Health Economics, Elsevier, vol. 14(5), pages 567-582, December.
  7. Joseph G. Altonji & Christina H. Paxson, 1987. "Labor Supply Preferences, Hours Constraints, and Hours-Wage Tradeoffs," NBER Working Papers 2121, National Bureau of Economic Research, Inc.
  8. Shields, Michael A. & Ward, Melanie, 2001. "Improving nurse retention in the National Health Service in England: the impact of job satisfaction on intentions to quit," Journal of Health Economics, Elsevier, vol. 20(5), pages 677-701, September.
  9. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521766555, October.
  10. Jan Erik Askildsen & Badi H. Baltagi & Tor Helge Holmås, 2002. "Will Increased Wages Reduce Shortage of Nurses? A Panel Data Analysis of Nurses' Labor Supply," 10th International Conference on Panel Data, Berlin, July 5-6, 2002 D1-2, International Conferences on Panel Data.
  11. Kostiuk, Peter F, 1990. "Compensating Differentials for Shift Work," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 1054-75, October.
  12. Aaberge, Rolf & Colombino, Ugo & Strom, Steinar, 1999. "Labour Supply in Italy: An Empirical Analysis of Joint Household Decisions, with Taxes and Quantity Constraints," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 14(4), pages 403-22, July-Aug..
  13. Michael A. Shields, 2004. "Addressing nurse shortages: what can policy makers learn from the econometric evidence on nurse labour supply?," Economic Journal, Royal Economic Society, vol. 114(499), pages F464-F498, November.
  14. Paul van den Noord & Terje Hagen & Tor Iversen, 1998. "The Norwegian Health Care System," OECD Economics Department Working Papers 198, OECD Publishing.
  15. Tor Helge Holmås, 2002. "Keeping nurses at work: a duration analysis," Health Economics, John Wiley & Sons, Ltd., vol. 11(6), pages 493-503.
  16. Lanfranchi, Joseph & Ohlsson, Henry & Skalli, Ali, 2001. "COMPENSATING WAGE DIFFERENTIALS AND SHIFT WORK PREFERENCES. Evidence from France," Working Papers in Economics 55, University of Gothenburg, Department of Economics.
  17. John K. Dagsvik & Anders Karlstr�m, 2005. "Compensating Variation and Hicksian Choice Probabilities in Random Utility Models that are Nonlinear in Income," Review of Economic Studies, Oxford University Press, vol. 72(1), pages 57-76.
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Cited by:
  1. Barbara Hanel & Guyonne Kalb & Anthony Scott, 2012. "Nurses' Labour Supply Elasticities: The Importance of Accounting for Extensive Margins," Melbourne Institute Working Paper Series wp2012n09, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.

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