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Underpaid or Overpaid? Wage Analysis for Nurses Using Job and Worker Attributes

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  • Hirsch, Barry

    ()
    (Georgia State University)

  • Schumacher, Edward J.

    ()
    (Trinity University)

Abstract

The nursing labor market presents an apparent puzzle. Hospitals report chronic shortages, yet standard wage analysis shows that nursing wages have increased over time and greatly exceed those received by other college-educated women. This paper addresses this puzzle. Data from the Current Population Survey (CPS) are matched with detailed job content descriptors from the Occupational Information Network (O*NET). Nursing jobs require higher levels of skills and more difficult working conditions than do jobs for other college educated workers. A standard CPS-only wage regression shows a registered nurse (RN) wage advantage of .22 log points compared to a pooled male/female group of college-educated workers. Control for O*NET job attributes reduces the RN gap to .08, while an arguably preferable nonparametric estimator produces a wage gap estimate close to zero. We conclude that nurses receive compensation close to long-run opportunity costs, narrowing if not resolving the RN wage-shortage puzzle.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3833.

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Length: 31 pages
Date of creation: Nov 2008
Date of revision:
Publication status: published in: Southern Economic Journal, 2012, 78 (4), 1096-1119.
Handle: RePEc:iza:izadps:dp3833

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Keywords: job attributes; wage differentials; nursing;

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  1. James J. Heckman & Jora Stixrud & Sergio Urzua, 2006. "The Effects of Cognitive and Noncognitive Abilities on Labor Market Outcomes and Social Behavior," NBER Working Papers 12006, National Bureau of Economic Research, Inc.
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  9. Christopher R. Bollinger & Barry T. Hirsch, 2006. "Match Bias from Earnings Imputation in the Current Population Survey: The Case of Imperfect Matching," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 24(3), pages 483-520, July.
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  11. 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, Cornell University, ILR School, vol. 50(4), pages 557-579, July.
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  15. Hirsch, Barry & Schumacher, Edward J., 2003. "Match Bias in Wage Gap Estimates Due to Earnings Imputation," IZA Discussion Papers 783, Institute for the Study of Labor (IZA).
  16. Ingram, Beth F. & Neumann, George R., 2006. "The returns to skill," Labour Economics, Elsevier, Elsevier, vol. 13(1), pages 35-59, February.
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Cited by:
  1. Hirsch, Barry & Manzella, Julia, 2014. "Who Cares – and Does It Matter? Measuring Wage Penalties for Caring Work," IZA Discussion Papers 8388, Institute for the Study of Labor (IZA).
  2. Patricia Cortés & Jessica Pan, 2012. "Relative Quality of Foreign Nurses in the United States," CReAM Discussion Paper Series 1231, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.

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