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Can Human Capital Theory Explain why Nurses are so Poorly Paid?

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  • Margaret J. Nowak
  • Alison C. Preston

Abstract

This paper uses Australian Census data to examine the earnings of female professionals. Comparisons are made between Registered Nurses (RNs), Teachers, Social Professionals, Health Professionals and Business Professionals. Wage decompositions show that RNs earn significantly less than other female Professionals and that the observed differentials can not be explained by differences in human capital endowments. The evidence presented is strongly suggestive of monopsonist or oligopsonist power in the setting of nurse wages – with a manifestation being persistent labour market disequilibrium. Changing the relative reward structure for nurses may help address the on‐going nursing ‘shortage’ in Australia, although further research in this area is called for.

Suggested Citation

  • Margaret J. Nowak & Alison C. Preston, 2001. "Can Human Capital Theory Explain why Nurses are so Poorly Paid?," Australian Economic Papers, Wiley Blackwell, vol. 40(2), pages 232-245, June.
    • Handle: RePEc:bla:ausecp:v:40:y:2001:i:2:p:232-245
    DOI: 10.1111/1467-8454.00124
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    Cited by:

    1. Jill Rubery & Annamaria Simonazzi & Kevin Ward, 2010. "Exploring international migration and outsourcing through an institutional lens," BIS Papers chapters, in: Globalisation, labour markets and international adjustment - Essays in honour of Palle S Andersen, volume 50, pages 77-103, Bank for International Settlements.
    2. Jill Rubery, 2013. "Public sector adjustment and the threat to gender equality," Chapters, in: Daniel Vaughan-Whitehead (ed.), Public Sector Shock, chapter 2, pages 43-83, Edward Elgar Publishing.

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