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

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  • 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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    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.

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    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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