Nurses' Labour Supply Elasticities: The Importance of Accounting for Extensive Margins
Many countries face a continuing shortage in nurses’ labour supply. Previous research suggests that nurses respond only weakly to changes in wages. However, the decision to exit or enter the nursing profession has not been taken into account in previous studies, although the occupational choice may be more responsive to wages than the labour supply decision at the intensive margin. We estimate a multi-sector model of nursing qualification holders’ labour supply in different occupations. A structural approach allows us to model the labour force participation decision, the occupational and shift-type choice, and the decision about hours worked as a joint outcome following from maximizing a utility function. Disutility from work is allowed to vary by occupation and also by shift type in the utility function. Furthermore, we allow the preference parameters in the utility function to vary by certain family characteristics and personality. This may be important because the high incidence of shift work, potentially impeding the balance of work and family life, and the high level of emotional and personal involvement required in the profession suggest that the labour supply of nurses might depend on their personality and their family circumstances. Our results suggest that average wage elasticities might be higher than previous research has found. This is mainly due to the effect of wages on the decision to enter or exit the profession, which was not included in the previous literature, rather than from its effect on increased working hours for those who already work in the profession. We find that the negative labour supply elasticities with respect to income are higher for nurses with children, while the positive elasticities with respect to wages are higher for low-qualified, older and childless nurses. Elasticities do not appear to vary by personality trait.
|Date of creation:||May 2012|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +61 3 8344 2100
Fax: +61 3 8344 2111
Web page: http://www.melbourneinstitute.com/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Benham, Lee, 1971. "The Labor Market for Registered Nurses: A Three-Equation Model," The Review of Economics and Statistics, MIT Press, vol. 53(3), pages 246-52, August.
- Maria Laura Di Tommaso & S. Strøm & E. M. Sæther, 2007.
"Nurses Wanted. Is the job too harsh or is the wage too low?,"
CHILD Working Papers
wp11_07, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY.
- 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.
- Di Tommaso Maria Laura & Strom Steinar & Saether Erik Magnus, 2007. "Nurses Wanted. Is the Job Too Harsh or is the Wage Too Low?," Department of Economics and Statistics Cognetti de Martiis. Working Papers 200704, University of Turin.
- Di Tommaso, M. L. & Strøm, Steinar & Sæther, Erik Magnus, 2008. "Nurses Wanted: Is the Job Too Hars or is the Wage Too Low," Memorandum 08/2008, Oslo University, Department of Economics.
- Creedy, John & Duncan, Alan, 2002. " Behavioural Microsimulation with Labour Supply Responses," Journal of Economic Surveys, Wiley Blackwell, vol. 16(1), pages 1-39, February.
- V. Joseph Hotz & John Karl Scholz, 2001.
"The Earned Income Tax Credit,"
NBER Working Papers
8078, National Bureau of Economic Research, Inc.
- Xiaodong Gong & Robert Breunig & Anthony King, 2011.
"Partnered women's labour supply and child care costs in Australia: Measurement error and the child care price,"
NATSEM Working Paper Series
11/13, University of Canberra, National Centre for Social and Economic Modelling.
- Robert Breunig & Xiaodong Gong & Anthony King, 2012. "Partnered Women's Labour Supply and Child‐Care Costs in Australia: Measurement Error and the Child‐Care Price," The Economic Record, The Economic Society of Australia, vol. 88(s1), pages 51-69, 06.
- Xiaodong Gong & Robert Breuing & Anthony King, 2011. "Partnered women’s labour supply and child care costs in Australia: measurement error and the child care price," CEPR Discussion Papers 652, Centre for Economic Policy Research, Research School of Economics, Australian National University.
- 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.
- Arthur van Soest, 1995. "Structural Models of Family Labor Supply: A Discrete Choice Approach," Journal of Human Resources, University of Wisconsin Press, vol. 30(1), pages 63-88.
- 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.
- Cobb-Clark, Deborah A. & Schurer, Stefanie, 2012.
"The stability of big-five personality traits,"
Elsevier, vol. 115(1), pages 11-15.
- Cobb-Clark, Deborah & Schurer, Stefanie, 2011. "The stability of big-five personality traits," Working Paper Series 1834, Victoria University of Wellington, School of Economics and Finance.
- Cobb-Clark, Deborah A. & Schurer, Stefanie, 2011. "The Stability of Big-Five Personality Traits," IZA Discussion Papers 5943, Institute for the Study of Labor (IZA).
- Deborah Cobb-Clark & Stefanie Schurer, 2011. "The Stability of Big-Five Personality Traits," Melbourne Institute Working Paper Series wp2011n21, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
- Tom Kornstad & Thor Thoresen, 2007.
"A discrete choice model for labor supply and childcare,"
Journal of Population Economics,
Springer, vol. 20(4), pages 781-803, October.
- Tom Kornstad & Thor O. Thoresen, 2002. "A Discrete Choice Model for Labor Supply and Child Care," Discussion Papers 315, Statistics Norway, Research Department.
- Chiha, Yvana A. & Link, Charles R., 2003. "The shortage of registered nurses and some new estimates of the effects of wages on registered nurses labor supply: a look at the past and a preview of the 21st century," Health Policy, Elsevier, vol. 64(3), pages 349-375, June.
- Michael P. Keane & Robert Moffitt, 1995.
"A structural model of multiple welfare program participation and labor supply,"
557, Federal Reserve Bank of Minneapolis.
- Keane, Michael & Moffitt, Robert, 1998. "A Structural Model of Multiple Welfare Program Participation and Labor Supply," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(3), pages 553-89, August.
- M. Keane & R. Moffitt, . "A structural model of multiple welfare program participation and labor supply," Institute for Research on Poverty Discussion Papers 1080-96, University of Wisconsin Institute for Research on Poverty.
- M. Keane & R. Mofitt, 1995. "A Structural Model of Multiple Welfare Program Participation and Labor Supply," Working Papers 95-4, Brown University, Department of Economics.
- Michael A. Shields, 2004. "Addressing nurse shortages: what can policy makers learn from the econometric evidence on nurse labour supply?," Economic Journal, Royal Economic Society, vol. 114(499), pages F464-F498, November.
- Eduardo Pontual Ribeiro, 2001. "Asymmetric labor supply," Empirical Economics, Springer, vol. 26(1), pages 183-197.
- Link, Charles R. & Settle, Russell F., 1985. "Labor supply responses of licensed practical nurses: A partial solution to a nurse shortage?," Journal of Economics and Business, Elsevier, vol. 37(1), pages 49-57, February.
- Munasinghe, Lalith & Reif, Tania & Henriques, Alice, 2008. "Gender gap in wage returns to job tenure and experience," Labour Economics, Elsevier, vol. 15(6), pages 1296-1316, December.
- Elisa-Rose Birch, 2005. "Studies of the Labour Supply of Australian Women: What Have We Learned?," The Economic Record, The Economic Society of Australia, vol. 81(252), pages 65-84, 03.
- 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.
- 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.
- Clark, Andrew E., 2001. "What really matters in a job? Hedonic measurement using quit data," Labour Economics, Elsevier, vol. 8(2), pages 223-242, May.
- 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.
- Link, Charles R & Settle, Russell F, 1981. "Wage Incentives and Married Professional Nurses: A Case of Backward-Bending Supply?," Economic Inquiry, Western Economic Association International, vol. 19(1), pages 144-56, January.
- Richard Blundell & Thomas MaCurdy, 1998.
"Labour supply: a review of alternative approaches,"
IFS Working Papers
W98/18, Institute for Fiscal Studies.
- Divine Ikenwilo & Anthony Scott, 2007. "The effects of pay and job satisfaction on the labour supply of hospital consultants," Health Economics, John Wiley & Sons, Ltd., vol. 16(12), pages 1303-1318.
- Andrew Cook & Martin Gaynor & Melvin Stephens, Jr. & Lowell Taylor, 2010. "The Effect of Hospital Nurse Staffing on Patient Health Outcomes: Evidence from California's Minimum Staffing Regulation," NBER Working Papers 16077, National Bureau of Economic Research, Inc.
- Charles R. Link & Russell F. Settle, 1979. "Labor Supply Responses of Married Professional Nurses: New Evidence," Journal of Human Resources, University of Wisconsin Press, vol. 14(2), pages 256-266.
- Iris Claus & Norman Gemmell & Michelle Harding & David White (ed.), 2010. "Tax Reform in Open Economies," Books, Edward Elgar, number 13704, March.
- Diane Sk�tun & 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.
- Dockery, AM & Barns, A, 2005. "Who’d be a Nurse? Some Evidence on Career Choice in Australia," Australian Bulletin of Labour, National Institute of Labour Studies, vol. 31(4), pages 350-383.
- Nigel Rice, 2005. "The labour supply of nurses in the UK: evidence from the British Household Panel Survey," Health, Econometrics and Data Group (HEDG) Working Papers 05/10, HEDG, c/o Department of Economics, University of York.
When requesting a correction, please mention this item's handle: RePEc:iae:iaewps:wp2012n09. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Abbey Treloar)
If references are entirely missing, you can add them using this form.