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Nurses’ labor supply with endogenous choice of care level and shift type A nested discrete choice model with nonlinear income

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Author Info
Sæther, Erik Magnus () (Ragnar Frisch Centre for Economic Research)
Abstract

Shift work has a documented negative impact on workers’ health and social life, effects which are compensated for with higher wages and shorter working hours. Many countries face a ‘nursing shortage’, and increasing wages is argued to lead to an increase in the short-term labor supply in health care. Omitting shift work in the evaluation of such policies may lead to biased estimates of the wage elasticities. Focusing on registered nurses (RN) employed in the public health sector, this paper presents an econometric analysis that allows the nurses to compose their ‘job package’ in three steps by choosing: a) hospital or primary care, b) daytime or shift work and c) one of four categories of hours. The utility maximization problem is solved by discretizing the budget set and choosing the optimal job package from a finite set of alternatives. The nested structure is estimated on Norwegian micro data. There is some variation in the responsiveness to wage between shift and day workers and by care level. The job-specific elasticities are small but positive. However, the simulation of a wage increase in all job types, when conditioning the analysis to those already participating in the sector, indicates a slight reduction in hours. Thus, the income effect seems to dominate in the labor supply of nurses.

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Publisher Info
Paper provided by Oslo University, Health Economics Research Programme in its series HERO On line Working Paper Series with number 2004:9.

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Length: 28 pages
Date of creation: 14 Jun 2009
Date of revision:
Handle: RePEc:hhs:oslohe:2004_009

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Postal: HERO / Institute of Health Management and Health Economics P.O. Box 1089 Blindern, N-0317 Oslo, Norway
Phone: 2307 5309
Fax: 2307 5310
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Web page: http://www.hero.uio.no/eng.html
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Related research
Keywords: Registered nurses; discrete choice; labor supply; selection; nested logit; sector-specific wages;

Find related papers by JEL classification:
C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models
I10 - Health, Education, and Welfare - - Health - - - General
J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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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. 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. [Downloadable!] (restricted)
  2. Aaberge, Rolf & Dagsvik, John K & Strom, Steinar, 1995. " Labor Supply Responses and Welfare Effects of Tax Reforms," Scandinavian Journal of Economics, Blackwell Publishing, vol. 97(4), pages 635-59, December.
  3. Aaberge, Rolf & Colombino, Ugo & Strom, Steinar, 1999. "Labour Supply in Italy: An Empirical Analysis of Joint Household Decisions, with Taxes and Quantity Constraints," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 14(4), pages 403-22, July-Aug.. [Downloadable!]
  4. 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!]
  5. Edward J. Schumacher & Barry T. Hirsch, 1997. "Compensating differentials and unmeasured ability in the labor market for nurses: Why do hospitals pay more?," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 50(4), pages 557-579, July.
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  6. Lanfranchi, Joseph & Ohlsson, Henry & Skalli, Ali, 2002. "Compensating wage differentials and shift work preferences," Economics Letters, Elsevier, vol. 74(3), pages 393-398, February. [Downloadable!] (restricted)
  7. Kostiuk, Peter F, 1990. "Compensating Differentials for Shift Work," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 1054-75, October. [Downloadable!] (restricted)
  8. Macurdy, T. & Green, D. & Paarsch, H., 1990. "Assessing Empirical Approaches For Analyzing Taxes And Labor Supply," Papers e-90-11, Stanford - Hoover Institution.
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