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Will Increased Wages Reduce Shortage of Nurses? A Panel Data Analysis of Nurses’ Labour Supply


  • Askildsen, Jan Erik

    () (Programme for Health Economics in Bergen, Department of Economics, University of Bergen)

  • Baltagi, Badi H.

    () (Texas A&M University, Department of Economics)

  • Holmås, Tor Helge

    () (Programme for Health Economics in Bergen, Department of Economics, University of Bergen)


Shortage of nurses is a problem in several countries. It is an unsettled question whether increasing wages constitute a viable policy for extracting more labour supply from nurses. In this paper we use a unique matched panel data set of Norwegian nurses covering the period 1993-1998 to estimate wage elasticities. The data set includes detailed information on 19,638 individuals over 6 years totalling 69,122 observations. The estimated wage elasticity after controlling for individual heterogeneity, sample selection and instrumenting for possible endogeneity is 0.21. Individual and institutional features are statistically significant and important for working hours. Contractual arrangements as represented by shift work are also important for hours of work, and omitting information about this common phenomenon will underestimate the wage effect.

Suggested Citation

  • 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.
  • Handle: RePEc:hhs:bergec:2002_021

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    References listed on IDEAS

    1. Sophia Rabe-Hesketh & Anders Skrondal & Andrew Pickles, 2002. "Reliable estimation of generalized linear mixed models using adaptive quadrature," Stata Journal, StataCorp LP, vol. 2(1), pages 1-21, February.
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    Cited by:

    1. Di Tommaso, M.L. & Strøm, S. & Sæther, E.M., 2009. "Nurses wanted: Is the job too harsh or is the wage too low?," Journal of Health Economics, Elsevier, vol. 28(3), pages 748-757, May.
    2. Carol Propper & John Van Reenen, 2010. "Can Pay Regulation Kill? Panel Data Evidence on the Effect of Labor Markets on Hospital Performance," Journal of Political Economy, University of Chicago Press, vol. 118(2), pages 222-273, April.
    3. Paul Frijters & Michael A. Shields & Stephen Wheatley Price, 2007. "Investigating the quitting decision of nurses: panel data evidence from the british national health service," Health Economics, John Wiley & Sons, Ltd., vol. 16(1), pages 57-73.
    4. Dolado, Juan J. & Felgueroso, Florentino, 2008. "Occupational Mismatch and Moonlighting Among Spanish Physicians: Do Couples Matter?," CEPR Discussion Papers 6803, C.E.P.R. Discussion Papers.
    5. Badi H. Baltagi & Espen Bratberg & Tor Helge Holmås, 2003. "A Panel Data Study of Physicians’ Labor Supply: The Case of Norway," CESifo Working Paper Series 895, CESifo Group Munich.
    6. repec:spr:empeco:v:52:y:2017:i:4:d:10.1007_s00181-016-1116-2 is not listed on IDEAS
    7. Diane Skåtun & Emanuela Antonazzo & Anthony Scott & Robert Elliott, 2005. "The supply of qualified nurses: a classical model of labour supply," Applied Economics, Taylor & Francis Journals, vol. 37(1), pages 57-65.

    More about this item


    Nurses; labour supply; panel data; selection; semi-parametric models.;

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations


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