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Classic Monopsony or New Monopsony? Searching for Evidence in Nursing Labor Markets

Author

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  • Hirsch, Barry

    () (Georgia State University)

  • Schumacher, Edward J.

    () (Trinity University)

Abstract

The market for hospital registered nurses (RNs) is often offered as an example of "classic" monopsony, while a "new" monopsony literature emphasizes firm labor supply being upward-sloping for reasons other than market structure. Using data from several sources, we explore the relationship between wages and measures of classic and new monopsony. Micro wage data for 1993-2002 provide little evidence of classic monopsonistic outcomes in the long run, the relative wages of RNs in 240 U.S. labor markets being largely uncorrelated with market size or employer concentration. A short-run relationship is found, with RN wages declining in markets with increased hospital system concentration. Measures of new monopsony use data on mobility to proxy inverse supply elasticities. No relationship is found between these measure and nursing wages, but evidence supporting new monopsony is found for women elsewhere in the labor market. RNs display greater inter-employer mobility than do women (or men) in general. Two conclusions follow. First, evidence of upward sloping labor supply need not imply monopsonistic outcomes. Second, nursing should not be held up as a prototypical example of monopsony.

Suggested Citation

  • Hirsch, Barry & Schumacher, Edward J., 2004. "Classic Monopsony or New Monopsony? Searching for Evidence in Nursing Labor Markets," IZA Discussion Papers 1154, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp1154
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    References listed on IDEAS

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    Cited by:

    1. Giovanni Sulis, 2011. "What can monopsony explain of the gender wage differential in Italy?," International Journal of Manpower, Emerald Group Publishing, vol. 32(4), pages 446-470, July.
    2. Hirsch, Barry T. & Schumacher, Edward J., 2005. "Classic or new monopsony? Searching for evidence in nursing labor markets," Journal of Health Economics, Elsevier, vol. 24(5), pages 969-989, September.
    3. Serena Huang, 2011. "The international transferability of human capital in nursing," International Journal of Health Economics and Management, Springer, vol. 11(3), pages 145-163, September.
    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.

    More about this item

    Keywords

    monopsony; nurses; wages; hospitals;

    JEL classification:

    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
    • I10 - Health, Education, and Welfare - - Health - - - General
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General

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