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Will Increased Wages Reduce Shortage of Nurses? A Panel Data Analysis of Nurses' Labor Supply

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Author Info
Jan Erik Askildsen (University of Bergen)
Badi H. Baltagi (Texas A&M University)
Tor Helge Holmås (University of Bergen)

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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 labor supply from nurses. In this paper we use a unique matched panel data set of Norwegian nurses covering the period 1993-1997 to estimate wage elasticities. This data includes detailed information on 18,066 individuals over 5 years totaling 56,832 observations. The estimated elasticity when controlling for individual and time invariant fixed effects is significantly positive but not very high in magnitude. Individual and institutional features are significant and important for working hours. We have also access to information about contractual arrangements. It turns out that shift work is important for hours of work, and that omitting information about this common phenomenon will underestimate the wage effect.

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Paper provided by International Conferences on Panel Data in its series 10th International Conference on Panel Data, Berlin, July 5-6, 2002 with number D1-2.

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Date of creation: Mar 2002
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Handle: RePEc:cpd:pd2002:d1-2

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Related research
Keywords: Nurses; labor supply; panel data; selection;

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Find related papers by JEL classification:
I10 - Health, Education, and Welfare - - Health - - - General
J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. 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. [Downloadable!] (restricted)
  2. Heckman, James J, 1979. "Sample Selection Bias as a Specification Error," Econometrica, Econometric Society, vol. 47(1), pages 153-61, January. [Downloadable!] (restricted)
  3. Ekaterini Kyriazidou, 1997. "Estimation of a Panel Data Sample Selection Model," Econometrica, Econometric Society, vol. 65(6), pages 1335-1364, November.
  4. Killingsworth, Mark R. & Heckman, James J., 1987. "Female labor supply: A survey," Handbook of Labor Economics, in: O. Ashenfelter & R. Layard (ed.), Handbook of Labor Economics, edition 1, volume 1, chapter 2, pages 103-204 Elsevier. [Downloadable!] (restricted)
  5. 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). [Downloadable!]
  6. 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. [Downloadable!]
  7. Barry T. Hirsch & Edward J. Schumacher, . "Union Wages, Rents, and Skills in Health Care Labor Markets," Working Papers 9603, East Carolina University, Department of Economics. [Downloadable!]
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  8. Hirsch, B.T. & Schumacher, E.J., 1993. "Monopsony Power and Relative Wages in the Labor Market for Nurses," Working Papers 1993_06_03, Department of Economics, Florida State University.
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  9. Charlier, E. & Melenberg, B. & Soest, A. van, 1997. "An analysis of housing expenditure using semiparametric models and panel data," Discussion Paper 14, Tilburg University, Center for Economic Research. [Downloadable!]
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Cited by:
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  1. Dolado, Juan José & Felgueroso, Florentino, 2008. "Occupational Mismatch and Moonlighting among Spanish Physicians: Do Couples Matter?," IZA Discussion Papers 3419, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  2. Badi Baltagi & Espen Bratberg & Tor Helge Holmas, 2003. "A Panel Data Study of Physicians' Labor Supply: The Case of Norway," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  3. Diane Skåtun & Emanuela Antonazzo & Anthony Scott & Robert F. Elliott, 2005. "The supply of qualified nurses: a classical model of labour supply," Applied Economics, Taylor and Francis Journals, vol. 37(1), pages 57-65, January. [Downloadable!] (restricted)
  4. Emma Hall & Carol Propper & John Van Reenen, 2008. "Can pay regulation kill? Panel data evidence on the effect of labor markets on hospital performance," NBER Working Papers 13776, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  5. Maria Laura Di Tommaso & S. Strøm & E. M. Sæther, 2007. "Nurses Wanted. Is the job too harsh or is the wage too low?," CHILD Working Papers wp11_07, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY. [Downloadable!]
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  6. Paul Frijters & Michael Shields & Stephen Wheatley Price, 2004. "Investigating the Quitting Decision of Nurses: Panel Data Evidence from the British National Health Service," CEPR Discussion Papers 471, Centre for Economic Policy Research, Research School of Social Sciences, Australian National University. [Downloadable!]
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