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The Deadly Consequences of Labor Scarcity: Evidence from Hospitals

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  • Schlenker, Oliver

Abstract

This paper estimates the impact of nursing shortages in hospitals on healthcare provision and patient outcomes by exploiting a strong and stable appreciation of the Swiss franc in 2011. Due to collective bargaining hindering wage adjustments in the German healthcare sector, cross-border wage differentials increased and led to a significant outflow of German registered nurses to Switzerland, causing a 12.5% reduction in nurse staffing rates in German hospitals near the border. Using a matched difference-in-differences approach, I find that hospitals responded by decreasing care intensity, leading to a 12% decrease in surgeries. Although hospitals are increasingly performing triage, also patients with high medical needs - such as elderly and emergency cases - face a reduction in care and, consequently, a stark increase in mortality rates, resulting in a measurable decline in regional life expectancy.
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Suggested Citation

  • Schlenker, Oliver, 2025. "The Deadly Consequences of Labor Scarcity: Evidence from Hospitals," VfS Annual Conference 2025 (Cologne): Revival of Industrial Policy 325427, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc25:325427
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    Cited by:

    1. Castro-Pires, Henrique & Fischer, Kai & Mello, Marco & Moscelli, Giuseppe, 2025. "Immigration, Workforce Composition, and Organizational Performance: The Effect of Brexit on NHS Hospital Quality," IZA Discussion Papers 17797, IZA Network @ LISER.
    2. Toikka, Max & Saxell, Tanja & Siikanen, Markku, 2026. "Labor Market Effects of Private Provider Entry in Social and Health Services," Working Papers 184, VATT Institute for Economic Research.

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    More about this item

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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