This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

Cut to the Bone? Hospital Takeovers and Nurse Employment Contracts

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Janet Currie
Mehdi Farsi
W. Bentley MacLeod

Additional information is available for the following registered author(s):

Abstract

This paper uses data from the 1990s to examine changes in the wages, employment, and effort of nurses in California hospitals following takeovers by large chains. The market for nurses has been described as a classic monopsony, so that one might expect increases in firm market power to be associated with declines in wages. However, we show that if one extends the monopsony model to consider effort, or if we apply a basic contracting model to the data, then we would expect to see effects on effort rather than on wages. This prediction is bourne out by the data nurses see few declines in wages following takeovers, but see increases in the number of patients per nurse, our measure of effort. We also find that these changes are similar in the largest for-profit and non-profit chains, suggesting that market forces are more more important than institutional form.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.nber.org/papers/w9428.pdf
File Format: application/pdf
File Function:
Download Restriction: Access to the full text is generally limited to series subscribers, however if the top level domain of the client browser is in a developing country or transition economy free access is provided. More information about subscriptions and free access is available at http://www.nber.org/wwphelp.html.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Publisher Info
Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 9428.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length:
Date of creation: Jan 2003
Date of revision:
Handle: RePEc:nbr:nberwo:9428

Note: HC LS
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Phone: 617-868-3900
Email:
Web page: http://www.nber.org
More information through EDIRC

For technical questions regarding this item, or to correct its listing, contact: ().

Related research
Keywords:

Other versions of this item:

Find related papers by JEL classification:
I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets

This paper has been announced in the following NEP Reports:

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. Edward L. Glaeser & Andrei Shleifer, 1998. "Not-For-Profit Entrepreneurs," Harvard Institute of Economic Research Working Papers 1852, Harvard - Institute of Economic Research.
    Other versions:
  2. Krishnan, Ranjani, 2001. "Market restructuring and pricing in the hospital industry," Journal of Health Economics, Elsevier, vol. 20(2), pages 213-237, March. [Downloadable!] (restricted)
  3. Martin Gaynor & William B. Vogt, 1999. "Antitrust and Competition in Health Care Markets," NBER Working Papers 7112, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  4. Janet Currie & John Fahr, 2002. "Medicaid Managed Care: Effects on Children's Medicaid Coverage and Utilization," NBER Working Papers 8812, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  5. Daniel Sullivan, 1989. "Monopsony Power in the Market for Nurses," NBER Working Papers 3031, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  6. Currie, Janet & Fahr, John, 2004. "Hospitals, managed care, and the charity caseload in California," Journal of Health Economics, Elsevier, vol. 23(3), pages 421-442, May. [Downloadable!] (restricted)
    Other versions:
  7. Brown, James N & Ashenfelter, Orley, 1986. "Testing the Efficiency of Employment Contracts," Journal of Political Economy, University of Chicago Press, vol. 94(3), pages S40-S87, June. [Downloadable!] (restricted)
    Other versions:
  8. Dranove, David, 1998. "Economies of scale in non-revenue producing cost centers: Implications for hospital mergers," Journal of Health Economics, Elsevier, vol. 17(1), pages 69-83, January. [Downloadable!] (restricted)
  9. Daniel P. Kessler & Mark B. McClellan, 2000. "Is Hospital Competition Socially Wasteful?," The Quarterly Journal of Economics, MIT Press, vol. 115(2), pages 577-615, May. [Downloadable!] (restricted)
  10. Ashenfelter, Orley & Hannan, Timothy, 1986. "Sex Discrimination and Product Market Competition: The Case of the Banking Industry," The Quarterly Journal of Economics, MIT Press, vol. 101(1), pages 149-73, February. [Downloadable!] (restricted)
  11. Keeler, Emmett B. & Melnick, Glenn & Zwanziger, Jack, 1999. "The changing effects of competition on non-profit and for-profit hospital pricing behavior," Journal of Health Economics, Elsevier, vol. 18(1), pages 69-86, January. [Downloadable!] (restricted)
  12. MacLeod, W Bentley & Malcomson, James M, 1998. "Motivation and Markets," American Economic Review, American Economic Association, vol. 88(3), pages 388-411, June. [Downloadable!] (restricted)
    Other versions:
  13. Jason R. Barro & David Cutler, 1997. "Consolidation in the Medical Care Marketplace: A Case Study from Masschusetts," NBER Working Papers 5957, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  14. Joseph G. Altonji & Paul J. Devereux, 1999. "The Extent and Consequences of Downward Nominal Wage Rigidity," NBER Working Papers 7236, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  15. Robert A. Connor Roger D. Feldman Bryan E. Dowd, 1998. "The Effects of Market Concentration and Horizontal Mergers on Hospital Costs and Prices," International Journal of the Economics of Business, Taylor and Francis Journals, vol. 5(2), pages 159-180, July. [Downloadable!] (restricted)
  16. Hirsch, Barry T. & Schumacher, Edward J., 1995. "Monopsony power and relative wages in the labor market for nurses," Journal of Health Economics, Elsevier, vol. 14(4), pages 443-476, October. [Downloadable!] (restricted)
    Other versions:
  17. Edward J. Schumacher & Barry T. Hirsch, . "Compensating Differentials and Unmeasured Ability in the Labor Market For Nurses: Why Do Hospitals Pay More?," Working Papers 9604, East Carolina University, Department of Economics. [Downloadable!]
    Other versions:
  18. Sullivan, Daniel, 1989. "Monopsony Power in the Market for Nurses," Journal of Law & Economics, University of Chicago Press, vol. 32(2), pages S135-78, October.
  19. William M. Boal & Michael R. Ransom, 1997. "Monopsony in the Labor Market," Journal of Economic Literature, American Economic Association, vol. 35(1), pages 86-112, March. [Downloadable!] (restricted)
  20. David M. Cutler & Jill R. Horwitz, 1998. "Converting Hospitals from Not-for-profit to For-profit Status," NBER Working Papers 6672, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  21. John M. Abowd & Orley C. Ashenfelter, 1981. "Anticipated Unemployment, Temporary Layoffs, and Compensating Wage Differentials," NBER Chapters, in: Studies in Labor Markets, pages 141-186 National Bureau of Economic Research, Inc. [Downloadable!]
    Other versions:
  22. Pauly, Mark V, 1987. "Nonprofit Firms in Medical Markets," American Economic Review, American Economic Association, vol. 77(2), pages 257-62, May. [Downloadable!] (restricted)
  23. Sloan, Frank A., 2000. "Not-for-profit ownership and hospital behavior," Handbook of Health Economics, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 21, pages 1141-1174 Elsevier. [Downloadable!] (restricted)
  24. Paul F. Clark & Darlene A. Clark & David V. Day & Dennis G. Shea, 2001. "Healthcare reform and the workplace experience of nurses: Implications for patient care and union organizing," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 55(1), pages 133-148, October.
  25. Dranove, David & Satterthwaite, Mark A., 2000. "The industrial organization of health care markets," Handbook of Health Economics, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 20, pages 1093-1139 Elsevier. [Downloadable!] (restricted)
  26. David M. Cutler & Jill Horwitz, 2000. "Converting Hospitals from No t-for-Profit to For-Profit Status Why and What Effects?," NBER Chapters, in: The Changing Hospital Industry: Comparing For-Profit and Not-for-Profit Institutions, pages 45-90 National Bureau of Economic Research, Inc. [Downloadable!]
  27. Hart, Oliver D & Moore, John, 1988. "Incomplete Contracts and Renegotiation," Econometrica, Econometric Society, vol. 56(4), pages 755-85, July. [Downloadable!] (restricted)
    Other versions:
  28. Ho, Vivian & Hamilton, Barton H., 2000. "Hospital mergers and acquisitions: does market consolidation harm patients?," Journal of Health Economics, Elsevier, vol. 19(5), pages 767-791, September. [Downloadable!] (restricted)
  29. MacLeod, W Bentley & Malcomson, James M, 1993. "Investments, Holdup, and the Form of Market Contracts," American Economic Review, American Economic Association, vol. 83(4), pages 811-37, September. [Downloadable!] (restricted)
  30. Ashenfelter, Orley C, 1978. "Estimating the Effect of Training Programs on Earnings," The Review of Economics and Statistics, MIT Press, vol. 60(1), pages 47-57, February. [Downloadable!] (restricted)
  31. Oliver E. Williamson & Michael L. Wachter & Jeffrey E. Harris, 1975. "Understanding the Employment Relation: The Analysis of Idiosyncratic Exchange," Bell Journal of Economics, The RAND Corporation, vol. 6(1), pages 250-278, Spring. [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. Mehdi Farsi & Geert Ridder, 2006. "Estimating the out-of-hospital mortality rate using patient discharge data," Health Economics, John Wiley & Sons, Ltd., vol. 15(9), pages 983-995. [Downloadable!]
    Other versions:
  2. J.M. Etienne & A. Skalli, 2003. "Health Status and Socio-Economic Inequalities : A Review of the French Litterature," Working Papers ERMES 0317, ERMES, University Paris 2. [Downloadable!]
  3. Hirsch, Barry T. & Schumacher, Edward J., 2004. "Classic Monopsony or New Monopsony? Searching for Evidence in Nursing Labor Markets," IZA Discussion Papers 1154, Institute for the Study of Labor (IZA). [Downloadable!]
  4. Hirsch, Barry & Schumacher, Edward J., 2008. "Underpaid or Overpaid? Wage Analysis for Nurses Using Job and Worker Attributes," IZA Discussion Papers 3833, Institute for the Study of Labor (IZA). [Downloadable!]
  5. John P. Burkett, 2005. "The Labor Supply of Nurses and Nursing Assistants in the United States," Eastern Economic Journal, Eastern Economic Association, vol. 31(4), pages 585-599, Fall. [Downloadable!]
Statistics
Access and download statistics

Did you know? A tutorial is available.

This page was last updated on 2009-11-25.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.