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Investigating the Quitting Decision of Nurses: Panel Data Evidence from the British National Health Service

  • Paul Frijters
  • Michael Shields
  • Stephen Wheatley Price

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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File URL: http://cbe.anu.edu.au/researchpapers/cepr/DP471.pdf
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Paper provided by Centre for Economic Policy Research, Research School of Economics, Australian National University in its series CEPR Discussion Papers with number 471.

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Length: 31 pages
Date of creation: Apr 2004
Date of revision:
Handle: RePEc:auu:dpaper:471
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  1. 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.
  2. 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).
  3. 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.
  4. 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.
  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. 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.
  7. 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.
  8. 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.
  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. Richard Blundell & Thomas MaCurdy, 1998. "Labour supply: a review of alternative approaches," IFS Working Papers W98/18, Institute for Fiscal Studies.
  11. 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.
  12. Tor Helge Holmås, 2002. "Keeping nurses at work: a duration analysis," Health Economics, John Wiley & Sons, Ltd., vol. 11(6), pages 493-503.
  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. 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.
  15. 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.
  16. 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.
  17. 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.
  18. Michael Baker & Angelo Melino, 1999. "Duration Dependence and Nonparametric Heterogeneity: A Monte Carlo Study," Working Papers melino-99-01, University of Toronto, Department of Economics.
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