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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

  • Frijters, Paul

    ()
    (University of Queensland)

  • Shields, Michael A.

    ()
    (Monash University)

  • Wheatley Price, Stephen

    ()
    (University of Leicester)

Abstract

There is currently a worldwide shortage of registered nurses, driven by large shifts in both the demand for and supply of nurses. Consequently, various policies to increase the recruitment and retention of nurses are under discussion, in particular, the role that wage increases might have in promoting nurse labour supply. In this paper we provide the first detailed empirical investigation into the quitting behaviour of nurses in the British National Health Service (NHS), using a newly 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 NHS, 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, there is a clear movement away from shift work. Age, seniority, job and employer characteristics are all found to be important predictors of nurses leaving the NHS. However, whilst the effect of wages is found to be statistically significant, the predicted impact of an increase in nurses’ pay on retention rates is small. Our main conclusion, therefore, is that the current nurse shortages in the NHS will not be eliminated through substantially increased pay. Rather employers need to identify and address other aspects of the job which are driving nurses’ decisions to quit the NHS.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 794.

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Length: 28 pages
Date of creation: Jun 2003
Date of revision:
Publication status: published in: Health Economics, 2007, 16 (1), 57-74
Handle: RePEc:iza:izadps:dp794

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Keywords: NHS; quitting; hours; wages; panel data; nurses;

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References

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  1. 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.
  2. 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.
  3. Stephen Pudney & Michael Shields, 2000. "Gender, race, pay and promotion in the British nursing profession: estimation of a generalized ordered probit model," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 15(4), pages 367-399.
  4. Van den Berg, Gerard J., 2000. "Duration Models: Specification, Identification, and Multiple Durations," MPRA Paper 9446, University Library of Munich, Germany.
  5. 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).
  6. Shields, Michael A. & Ward, Melanie, 2001. "Improving nurse retention in the National Health Service in England: the impact of job satisfaction on intentions to quit," Journal of Health Economics, Elsevier, vol. 20(5), pages 677-701, September.
  7. 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).
  8. 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.
  9. 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.
  10. 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.
  11. 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.
  12. 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.
  13. 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.
  14. 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).
  15. 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.
  16. 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.
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Citations

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Cited by:
  1. Hall, Emma & Propper, Carol & Van Reenen, John, 2008. "Can Pay Regulation Kill? Panel Data Evidence on the Effect of Labour Markets on Hospital Performance," CEPR Discussion Papers 6643, C.E.P.R. Discussion Papers.
  2. Claude Montmarquette & Laure Thomas, 2005. "La pénurie de travailleurs qualifiés," CIRANO Project Reports 2005rp-03, CIRANO.
  3. 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.
  4. Budría, Santiago, 2012. "The shadow value of employer-provided training," Journal of Economic Psychology, Elsevier, vol. 33(3), pages 494-514.
  5. 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.
  6. 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.

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