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Investigating the quitting decision of nurses: panel data evidence from the british national health service

  • Paul Frijters

    (School of Economics and Finance, Queensland University of Technology, Australia)

  • Michael A. Shields

    (Department of Economics, University of Melbourne, Australia)

  • Stephen Wheatley Price

    (Department of Economics, University of Leicester, UK)

In this paper, we provide a detailed investigation into the quitting behaviour of nurses in the British National Health Service (NHS), using a recently 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 public sector, 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, while the effect of wages is found to be statistically significant, the predicted impact of an increase in nurses' pay on retention rates is small. The current nurse retention problem in the NHS is therefore unlikely to be eliminated through substantially increased pay. Copyright © 2006 John Wiley & Sons, Ltd.

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File URL: http://hdl.handle.net/10.1002/hec.1144
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Article provided by John Wiley & Sons, Ltd. in its journal Health Economics.

Volume (Year): 16 (2007)
Issue (Month): 1 ()
Pages: 57-73

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Handle: RePEc:wly:hlthec:v:16:y:2007:i:1:p:57-73
Contact details of provider: Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/5749

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  1. 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.
  2. Paul Frijters & Michael A. Shields & Stephen Wheatley Price, 2004. "To Teach or not to Teach? Panel Data Evidence on the Quitting Decision," Department of Economics - Working Papers Series 916, The University of Melbourne.
  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. 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.
  5. 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).
  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. Tor Helge Holmås, 2002. "Keeping nurses at work: a duration analysis," Health Economics, John Wiley & Sons, Ltd., vol. 11(6), pages 493-503.
  8. 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.
  9. M. F. Bognanno & J. S. Hixson & J. R. Jeffers, 1974. "The Short-Run Supply of Nurse's Time," Journal of Human Resources, University of Wisconsin Press, vol. 9(1), pages 80-94.
  10. Van den Berg, Gerard J., 2001. "Duration models: specification, identification and multiple durations," Handbook of Econometrics, in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 5, chapter 55, pages 3381-3460 Elsevier.
  11. 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.
  12. Richard Blundell & Thomas MaCurdy, 1998. "Labour supply: a review of alternative approaches," IFS Working Papers W98/18, Institute for Fiscal Studies.
  13. 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.
  14. 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).
  15. 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.
  16. 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.
  17. 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.
  18. 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, October.
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