Foreign nurse importation and the supply of native nurses

The importation of foreign registered nurses has been used as a strategy to ease nursing shortages in the United States. The effectiveness of this policy depends critically on the long-run response of native nurses. We examine the effects of immigration of foreign-born registered nurses on the long-run employment and occupational choice of native nurses. Using a variety of empirical strategies that exploit the geographical distribution of immigrant nurses across US cities, we find evidence of large displacement effects – over a ten-year period, for every foreign nurse that migrates to a city, between 1 and 2 fewer native nurses are employed in the city. We find similar results using data on nursing board exam-takers at the state level – an increase in the flow of foreign nurses significantly reduces the number of natives sitting for licensure exams in more dependent states relative to less dependent states. Using data on self-reported workplace satisfaction among a sample of California nurses, we find suggestive evidence that part of the displacement effects could be driven by a decline in the perceived quality of the workplace environment.