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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 (Australian National University)
Shields, Michael A. () (University of Melbourne and IZA Bonn)
Wheatley Price, Stephen (University of Leicester and IZA Bonn)

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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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Publisher 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:
Handle: RePEc:iza:izadps:dp794

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

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Find related papers by JEL classification:
J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets
J63 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Turnover; Vacancies; Layoffs
I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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. 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). [Downloadable!]
    Other versions:
  2. Pudney, Stephen & Shields, Michael A, 2000. " Gender and Racial Discrimination in Pay and Promotion for NHS Nurses," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 62(0), pages 801-35, Special I. [Downloadable!] (restricted)
    Other versions:
  3. 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). [Downloadable!]
    Other versions:
  4. Van den Berg, Gerard J., 2000. "Duration Models: Specification, Identification, and Multiple Durations," MPRA Paper 9446, University Library of Munich, Germany. [Downloadable!]
    Other versions:
  5. Morris, Stephen & McGuire, Alistair, 2002. "The Private Net Present Value and Private Internal Rate of Return to Becoming a Nurse in Great Britain," Applied Economics, Taylor and Francis Journals, vol. 34(17), pages 2189-2200, November. [Downloadable!] (restricted)
  6. 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.
  7. 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. [Downloadable!]
  8. 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. [Downloadable!] (restricted)
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  9. Jan Erik Askildsen & Badi H. Baltagi & Tor Helge Holmås, 2002. "Will Increased Wages Reduce Shortage of Nurses? A Panel Data Analysis of Nurses' Labor Supply," 10th International Conference on Panel Data, Berlin, July 5-6, 2002 D1-2, International Conferences on Panel Data. [Downloadable!]
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  10. Baker, Michael & Melino, Angelo, 2000. "Duration dependence and nonparametric heterogeneity: A Monte Carlo study," Journal of Econometrics, Elsevier, vol. 96(2), pages 357-393, June. [Downloadable!] (restricted)
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  11. Stephen Pudney & Michael Shields, . "Gender, Race, Pay and Promotion in the British Nursing Profession: Estimation of a Generalised Ordered Probit Model," Discussion Papers in Public Sector Economics 97/4, Department of Economics, University of Leicester.
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  12. 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!]
  13. Irene Hardill, Sandra MacDonald, 2000. "Skilled International Migration: The Experience of Nurses in the UK," Regional Studies, Taylor and Francis Journals, vol. 34(7), pages 681-692, October. [Downloadable!] (restricted)
  14. 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. [Downloadable!] (restricted)
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  15. 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. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, 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. 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). [Downloadable!]
    Other versions:
  2. Claude Montmarquette & Laure Thomas, 2005. "La pénurie de travailleurs qualifiés," CIRANO Project Reports 2005rp-03, CIRANO. [Downloadable!]
  3. 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. [Downloadable!]
  4. Emma Hall & Carol Propper & John Van Reenen, 2007. "Can pay regulation kill? Panel data evidence on the effect of labor markets on hospital performance," The Centre for Market and Public Organisation 08/184, Department of Economics, University of Bristol, UK. [Downloadable!]
    Other versions:
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