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Impact of individual and institutional factors on wage rate for nurses in Canada: is there a monopsony market?

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  • Ruolz Ariste
  • Ali Béjaoui

Abstract

Previous studies on Canadian nurse wages were limited to individual factors and did not take into account contextual factors such as hospital market share, labour market size or unionization. Based on market share, some refer to the nursing labour market as a monopsony, which depresses wages and might explain the shortage. However, this has not yet been tested empirically in the Canadian Registered Nurse (RN) labour market. This article aims to fill this gap by using the microdata files of the Labour Force Survey for the years 2010–2012 and the multilevel analysis to shed light on this issue. The contribution of this work is that it takes into account both individual and contextual variables to try to explain nurses’ hourly wage. In accordance with the monopsony model, we hypothesize a negative correlation between hourly wage and level of market share; i.e. monopsony employers would pay a lower wage rate. The results do not support the monopsony model to explain nursing labour shortage: there is no statistically significant relation between RN wages and market share; no relation was found for market size either. This suggests that an explanation for RN labour shortage must be investigated elsewhere.

Suggested Citation

  • Ruolz Ariste & Ali Béjaoui, 2019. "Impact of individual and institutional factors on wage rate for nurses in Canada: is there a monopsony market?," International Review of Applied Economics, Taylor & Francis Journals, vol. 33(5), pages 659-681, September.
    • Handle: RePEc:taf:irapec:v:33:y:2019:i:5:p:659-681
    DOI: 10.1080/02692171.2018.1518410
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    Cited by:

    1. Martin Kroczek & Jochen Späth, 2022. "The attractiveness of jobs in the German care sector: results of a factorial survey," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 23(9), pages 1547-1562, December.

    More about this item

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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