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Human Health Care and Selection Effects. Understanding Labour Supply in the Market for Nurses

Author

Listed:
  • Francesca Barigozzi

    ()

  • Gilberto Turati

Abstract

In this note we study (adverse) selection in a labour supply model where potential applicants are characterised by different vocational premiums and skills. We show how the composition of the pool of active workers changes as wage increases. Contrary to standard results, average productivity does not necessarily increase monotonically in the wage rate. We provide conditions such that a wage increase deteriorates either the average productivity or the average vocation of workers accepting the job. Our results are relevant to understand the potential impacts of a wage increase as a policy aimed at solving shortage in the market for nurses.

Suggested Citation

  • Francesca Barigozzi & Gilberto Turati, 2009. "Human Health Care and Selection Effects. Understanding Labour Supply in the Market for Nurses," CHILD Working Papers wp18_09, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY.
  • Handle: RePEc:wpc:wplist:wp18_09
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    File URL: http://www.child.carloalberto.org/images/wp/child18_2009.pdf
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    References listed on IDEAS

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    1. Francois, Patrick, 2000. "'Public service motivation' as an argument for government provision," Journal of Public Economics, Elsevier, vol. 78(3), pages 275-299, November.
    2. Heyes, Anthony, 2005. "The economics of vocation or 'why is a badly paid nurse a good nurse'?," Journal of Health Economics, Elsevier, vol. 24(3), pages 561-569, May.
    3. Timothy Besley & Maitreesh Ghatak, 2005. "Competition and Incentives with Motivated Agents," American Economic Review, American Economic Association, vol. 95(3), pages 616-636, June.
    4. 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.
    5. Patrick Francois, 2003. "Not-For-Profit Provision of Public Services," Economic Journal, Royal Economic Society, vol. 113(486), pages 53-61, March.
    6. Delfgaauw, Josse & Dur, Robert, 2007. "Signaling and screening of workers' motivation," Journal of Economic Behavior & Organization, Elsevier, vol. 62(4), pages 605-624, April.
    7. Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680.
    8. Siciliani, Luigi, 2009. "Paying for performance and motivation crowding out," Economics Letters, Elsevier, vol. 103(2), pages 68-71, May.
    9. 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.
    10. 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 464-498, November.
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    Cited by:

    1. Domenico Depalo & Raffaella Giordano, 2011. "The public-private pay gap: a robust quantile approach," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 70(1), pages 25-64, January.

    More about this item

    Keywords

    nurses labour supply; skill and vocation.;

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets

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