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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. Stephen Pudney & Michael Shields, . "Gender, Race, Pay and Promotion in the British Nursing Profession Estimation of a Generalised Ordered ProbitModel," Discussion Papers in Economics 97/4, Department of Economics, University of Leicester.
  2. 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.
  3. 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.
  4. 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.
  5. Askildsen, Jan Erik & Baltagi, Badi H. & Holmås, Tor Helge, 2002. "Will Increased Wages Reduce Shortage of Nurses? A Panel Data Analysis of Nurses’ Labour Supply," Working Papers in Economics 21/02, University of Bergen, Department of Economics.
  6. 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).
  7. 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.
  8. Michael A. Shields & Stephen Wheatley Price, . "Racial Harassment, Job Satisfaction and Intentions to Quit: Evidence from the British Nursing Profession," Discussion Papers in Public Sector Economics 01/2, Department of Economics, University of Leicester.
  9. Van den Berg, Gerard J., 2000. "Duration Models: Specification, Identification, and Multiple Durations," MPRA Paper 9446, University Library of Munich, Germany.
  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.
  11. 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.
  12. 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.
  13. 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.
  14. 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.
  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, October.
  16. Tor Helge Holmås, 2002. "Keeping nurses at work: a duration analysis," Health Economics, John Wiley & Sons, Ltd., vol. 11(6), pages 493-503.
  17. 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.
  18. 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.
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