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Compensating differentials for nurses

  • Sæther, Erik Magnus

    ()

    (Ragnar Frisch Centre for Economic Research)

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    When entering the job market registered nurses (RNs) face job alternatives with differences in wages and other job attributes. Previous studies of the nursing labor market have shown large earnings differences between similar hospital and non-hospital RNs. Corresponding differences are found in some of the analyses of shift and regular daytime workers. In the first part of this paper I analyze the wage differentials in the Norwegian public health sector, applying a switching regression model. I find no hospital premium for the shift RNs and a slightly negative hospital premium for the daytime RNs, but it is not significant for the hospital job choice. I find a positive shift premium. The wage rate is 19% higher for the shift working hospital RNs and 18% for the sample of primary care workers. The shift premium is only weakly significant for the shift work choice for the sample of hospital RNs, and not for the primary care RNs. I identify some selection effects. In the second part of the paper I focus on the shift compensation only, and present a structural labor supply model with a random utility function. This is done to identify the expected compensating variation necessary for the nurses to remain on the same utility level when they are “forced” from a day job to a shift job. The expected compensating variations are derived by Monte Carlo simulations and presented for different categories of hours. I find that on average the offered combination of higher wages, shorter working hours and increased flexibility overcompensates for the health and social strains related to shift work.

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    File URL: http://www.hero.uio.no/publicat/2004/HERO2004_10.pdf
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    Paper provided by Oslo University, Health Economics Research Programme in its series HERO On line Working Paper Series with number 2004:10.

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    Length: 45 pages
    Date of creation: 14 Jun 2009
    Date of revision:
    Handle: RePEc:hhs:oslohe:2004_010
    Contact details of provider: Postal: HERO / Institute of Health Management and Health Economics P.O. Box 1089 Blindern, N-0317 Oslo, Norway
    Phone: 2307 5309
    Fax: 2307 5310
    Web page: http://www.hero.uio.no/eng.htmlEmail:


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    1. Paul van den Noord & Terje Hagen & Tor Iversen, 1998. "The Norwegian Health Care System," OECD Economics Department Working Papers 198, OECD Publishing.
    2. Aaberge, Rolf & Colombino, Ugo & Strom, Steinar, 1999. "Labour Supply in Italy: An Empirical Analysis of Joint Household Decisions, with Taxes and Quantity Constraints," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 14(4), pages 403-22, July-Aug..
    3. Lanfranchi, Joseph & Ohlsson, Henry & Skalli, Ali, 2001. "COMPENSATING WAGE DIFFERENTIALS AND SHIFT WORK PREFERENCES. Evidence from France," Working Papers in Economics 55, University of Gothenburg, Department of Economics.
    4. Edward J. Schumacher & Barry T. Hirsch, 1997. "Compensating differentials and unmeasured ability in the labor market for nurses: Why do hospitals pay more?," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 50(4), pages 557-579, July.
    5. Kostiuk, Peter F, 1990. "Compensating Differentials for Shift Work," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 1054-75, October.
    6. Charles R. Link, 1988. "Returns to Nursing Education: 1970-84," Journal of Human Resources, University of Wisconsin Press, vol. 23(3), pages 372-387.
    7. LaVonne A. Booton & Julia I. Lane, 1985. "Hospital Market Structure and the Return to Nursing Education," Journal of Human Resources, University of Wisconsin Press, vol. 20(2), pages 184-196.
    8. Hamermesh, Daniel S, 1999. "The Timing of Work over Time," Economic Journal, Royal Economic Society, vol. 109(452), pages 37-66, January.
    9. Hwang, Hae-shin & Reed, W Robert & Hubbard, Carlton, 1992. "Compensating Wage Differentials and Unobserved Productivity," Journal of Political Economy, University of Chicago Press, vol. 100(4), pages 835-58, August.
    10. Aaberge, Rolf & Dagsvik, John K & Strom, Steinar, 1995. " Labor Supply Responses and Welfare Effects of Tax Reforms," Scandinavian Journal of Economics, Wiley Blackwell, vol. 97(4), pages 635-59, December.
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