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Wage policy in the health care sector: a panel data analysis of nurses' labour supply

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Author Info

  • Jan Erik Askildsen

    (Programme for Health Economics in Bergen, Department of Economics, University of Bergen, Norway)

  • Badi H. Baltagi

    (Department of Economics, Texas A&M University, USA)

  • Tor Helge Holmås

    (Programme for Health Economics in Bergen, Department of Economics, University of Bergen, Norway)

Abstract

Shortage of nurses is a problem in several countries. It is an unsettled question whether increasing wages constitute a viable policy for extracting more labour supply from nurses. In this paper we use a unique matched panel data set of Norwegian nurses covering the period 1993-1998 to estimate wage elasticities. The data set includes detailed information on 19 638 individuals over 6 years totalling 69 122 observations. The estimated wage elasticity after controlling for individual heterogeneity, sample selection and instrumenting for possible endogeneity is 0.21. Individual and institutional features are statistically significant and important for working hours. Contractual arrangements as represented by shift work are also important for hours of work, and omitting information about this common phenomenon will underestimate the wage effect. Copyright © 2003 John Wiley & Sons, Ltd.

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File URL: http://hdl.handle.net/10.1002/hec.836
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Bibliographic Info

Article provided by John Wiley & Sons, Ltd. in its journal Health Economics.

Volume (Year): 12 (2003)
Issue (Month): 9 ()
Pages: 705-719

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Handle: RePEc:wly:hlthec:v:12:y:2003:i:9:p:705-719

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Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/5749

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References

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  1. Dustmann, Christian & Rochina-Barrachina, María Engracia, 2000. "Selection Correction in Panel Data Models: An Application to Labour Supply and Wages," IZA Discussion Papers 162, Institute for the Study of Labor (IZA).
  2. Verbeek, M. & Nijman, T., 1990. "Testing For Selectivity Bias In Panel Data Models," Papers 9018, Tilburg - Center for Economic Research.
  3. Charlier, E. & Melenberg, B. & Soest, A.H.O. van, 1997. "An Analysis of Housing Expenditure Using Semiparametric Models and Panel Data," Discussion Paper 1997-14, Tilburg University, Center for Economic Research.
  4. Nijman, T.E. & Verbeek, M.J.C.M., 1992. "Testing for selectivity in panel data models," Open Access publications from Tilburg University urn:nbn:nl:ui:12-153280, Tilburg University.
  5. Bollinger, Christopher R, 1998. "Measurement Error in the Current Population Survey: A Nonparametric Look," Journal of Labor Economics, University of Chicago Press, vol. 16(3), pages 576-94, July.
  6. Ekaterini Kyriazidou, 1997. "Estimation of a Panel Data Sample Selection Model," Econometrica, Econometric Society, vol. 65(6), pages 1335-1364, November.
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Citations

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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.
  2. Paul Frijters & Michael A. Shields & Stephen Wheatley Price, 2007. "Investigating the quitting decision of nurses: panel data evidence from the british national health service," Health Economics, John Wiley & Sons, Ltd., vol. 16(1), pages 57-73.
  3. Wladimir Raymond & Pierre Mohnen & Franz Palm & Sybrand Schim van der Loeff, 2007. "The Behavior of the Maximum Likelihood Estimator of Dynamic Panel Data Sample Selection Models," CIRANO Working Papers 2007s-06, CIRANO.
  4. Sæther, Erik Magnus, 2009. "Nurses’ labor supply with endogenous choice of care level and shift type A nested discrete choice model with nonlinear income," HERO On line Working Paper Series 2004:9, Oslo University, Health Economics Research Programme.
  5. Sæther, Erik Magnus, 2009. "Will increased wages increase nurses' working hours in the health care sector?," HERO On line Working Paper Series 2004:7, Oslo University, Health Economics Research Programme.
  6. Catia Nicodemo, 2009. "Selection Bias and Unobservable Heterogeneity applied at the Wage Equation of European Married Women," Working Papers wpdea0906, Department of Applied Economics at Universitat Autonoma of Barcelona.
  7. T. Kankaanranta & P. Rissanen, 2009. "The labor supply of registered nurses in Finland: the effect of wages and working conditions," The European Journal of Health Economics, Springer, vol. 10(2), pages 167-178, May.
  8. Claude Montmarquette & Laure Thomas, 2005. "La pénurie de travailleurs qualifiés," CIRANO Project Reports 2005rp-03, CIRANO.
  9. Rodrigo A. Cerda & Diego Saravia, 2009. "Corporate Tax, Firm Destruction and Capital Stock Accumulation: Evidence From Chilean Plants, 1979-2004," Working Papers Central Bank of Chile 521, Central Bank of Chile.
  10. Mohnen, Pierre & Raymond, Wladimir & Palm, Franz & Schim van der Loeff, Sybrand, 2007. "The Behavior of the Maximum Likelihood Estimator of Dynamic Panel Data Sample Selection Models," MERIT Working Papers 007, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  11. Denise Doiron & Glenn Jones, 2004. "Nurses' retention and hospital characteristics in New South Wales, CHERE Discussion Paper No 52," Discussion Papers 52, CHERE, University of Technology, Sydney.
  12. Nilsson, William, 2005. "Unemployment, Splitting Up and Spousal Income Replacement," UmeÃ¥ Economic Studies 651, Umeå University, Department of Economics.
  13. Reagan Baughman & Kristin Smith, 2007. "The labor market for direct care workers," New England Public Policy Center Working Paper 07-4, Federal Reserve Bank of Boston.
  14. T. Kankaanranta & P. Rissanen, 2008. "Nurses’ intentions to leave nursing in Finland," The European Journal of Health Economics, Springer, vol. 9(4), pages 333-342, November.
  15. Alex Almeida & Boris Bravo-Ureta, 2011. "Agricultural Productivity And Off-Farm Labor Decisions By Heads And Spouses In Nicaragua: A Semiparametric Analysis Using Panel Data," ERSA conference papers ersa11p508, European Regional Science Association.
  16. Divine Ikenwilo & Anthony Scott, 2007. "The effects of pay and job satisfaction on the labour supply of hospital consultants," Health Economics, John Wiley & Sons, Ltd., vol. 16(12), pages 1303-1318.

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