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Investigating the quitting decision of nurses: panel data evidence from the british national health service

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Author Info

  • Paul Frijters

    (School of Economics and Finance, Queensland University of Technology, Australia)

  • Michael A. Shields

    (Department of Economics, University of Melbourne, Australia)

  • Stephen Wheatley Price

    (Department of Economics, University of Leicester, UK)

Abstract

In this paper, we provide a detailed investigation into the quitting behaviour of nurses in the British National Health Service (NHS), using a recently constructed longitudinal survey. We fit both single and competing risks duration models that enable us to establish the characteristics of those nurses who leave the public sector, distinguish the importance of pay in this decision and document the destinations that nurses move to. Contrary to expectations, we find that the hourly wage received by nurses outside of the NHS is around 20% lower than in the NHS, and that hours of work are about the same. However, while the effect of wages is found to be statistically significant, the predicted impact of an increase in nurses' pay on retention rates is small. The current nurse retention problem in the NHS is therefore unlikely to be eliminated through substantially increased pay. Copyright © 2006 John Wiley & Sons, Ltd.

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File URL: http://hdl.handle.net/10.1002/hec.1144
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Bibliographic Info

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

Volume (Year): 16 (2007)
Issue (Month): 1 ()
Pages: 57-73

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Handle: RePEc:wly:hlthec:v:16:y:2007:i:1:p:57-73

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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. Blundell, Richard & Macurdy, Thomas, 1999. "Labor supply: A review of alternative approaches," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 27, pages 1559-1695 Elsevier.
  2. Jan Erik Askildsen & Badi H. Baltagi & Tor Helge Holmås, 2003. "Wage policy in the health care sector: a panel data analysis of nurses' labour supply," Health Economics, John Wiley & Sons, Ltd., vol. 12(9), pages 705-719.
  3. Michael Baker & Angelo Melino, 1999. "Duration Dependence and Nonparametric Heterogeneity: A Monte Carlo Study," Working Papers melino-99-01, University of Toronto, Department of Economics.
  4. Dennis A. Ahlburg & Christine Brown Mahoney, 1996. "The Effect of Wages on the Retention of Nurses," Canadian Journal of Economics, Canadian Economics Association, vol. 29(s1), pages 126-29, April.
  5. Shields, Michael A. & Wheatley Price, Stephen, 2000. "Racial Harassment, Job Satisfaction and Intentions to Quit: Evidence from the British Nursing Profession," IZA Discussion Papers 164, Institute for the Study of Labor (IZA).
  6. Shields, Michael & Ward-Warmedinger, Melanie, 2001. "Improving Nurse Retention in the National Health Service in England: The Impact of Job Satisfaction on Intentions to Quit," CEPR Discussion Papers 2806, C.E.P.R. Discussion Papers.
  7. Gray, Alastair M. & Phillips, V. L. & Normand, Charles, 1996. "The costs of nursing turnover: evidence from the British National Health Service," Health Policy, Elsevier, vol. 38(2), pages 117-128, November.
  8. Van den Berg, Gerard J., 2000. "Duration Models: Specification, Identification, and Multiple Durations," MPRA Paper 9446, University Library of Munich, Germany.
  9. Stephen Pudney & Michael Shields, . "Gender, Race, Pay and Promotion in the British Nursing Profession Estimation of a Generalised Ordered ProbitModel," Discussion Papers in Economics 97/4, Department of Economics, University of Leicester.
  10. Emanuela Antonazzo & Anthony Scott & Diane Skatun & Robert. F. Elliott, 2003. "The labour market for nursing: a review of the labour supply literature," Health Economics, John Wiley & Sons, Ltd., vol. 12(6), pages 465-478.
  11. Jan Erik Askildsen & Badi H. Baltagi & Tor Helge Holmås, 2002. "Will Increased Wages Reduce Shortage of Nurses? A Panel Data Analysis of Nurses’ Labour Supply," CESifo Working Paper Series 794, CESifo Group Munich.
  12. Irene Hardill & Sandra Macdonald, 2000. "Skilled International Migration: The Experience of Nurses in the UK," Regional Studies, Taylor & Francis Journals, vol. 34(7), pages 681-692.
  13. Paul Frijters & Michael A. Shields & Stephen Wheatley Price, 2004. "To Teach Or Not To Teach? Panel Data Evidence On The Quitting Decision," Paul Frijters Discussion Papers 2004-5, School of Economics and Finance, Queensland University of Technology.
  14. 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.
  15. Stephen Morris & Alistair McGuire, 2002. "The private net present value and private internal rate of return to becoming a nurse in Great Britain," Applied Economics, Taylor & Francis Journals, vol. 34(17), pages 2189-2200.
  16. Pudney, Stephen & Shields, Michael A., 1999. "Gender and Racial Discrimination in Pay and Promotion for NHS Nurses," IZA Discussion Papers 85, Institute for the Study of Labor (IZA).
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Citations

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Cited by:
  1. Frijters, Paul & Shields, Michael A. & Wheatley Price, Stephen, 2004. "To Teach or Not to Teach? Panel Data Evidence on the Quitting Decision," IZA Discussion Papers 1164, Institute for the Study of Labor (IZA).
  2. Emma Hall & Carol Propper & John Van Reenen, 2008. "Can pay regulation kill? Panel data evidence on the effect of labor markets on hospital performance," LSE Research Online Documents on Economics 3282, London School of Economics and Political Science, LSE Library.
  3. Daniels, Frieda & Laporte, Audrey & Lemieux-Charles, Louise & Baumann, Andrea & Onate, Kanecy & Deber, Raisa, 2012. "Retaining nurses: The impact of Ontario's “70% Full-Time Commitment”," Health Policy, Elsevier, vol. 107(1), pages 54-65.
  4. Claude Montmarquette & Laure Thomas, 2005. "La pénurie de travailleurs qualifiés," CIRANO Project Reports 2005rp-03, CIRANO.
  5. Budría, Santiago, 2012. "The shadow value of employer-provided training," Journal of Economic Psychology, Elsevier, vol. 33(3), pages 494-514.
  6. 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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