The deadly consequences of labor scarcity: Evidence from hospitals

Healthcare systems worldwide face increasing nurse shortages, but the consequences remain poorly understood. This paper studies how nurse scarcity in hospitals affects care provision and patient health. I exploit the 2011 Swiss franc stabilization, which increased the salience to cross-border commute from Germany to Switzerland and led to an outflow of nurses in German hospitals depending on their distance to the border. Using rich universal patient-, hospital-, and county-level German and Swiss administrative data in a matched difference-in-differences design, I show that border hospitals lose around 12 percent of their nursing staff. This leads to lower care intensity and a reallocation of services towards urgent cases (triage) while healthcare demand or supply outside hospitals remains unchanged. Consequently, in-hospital mortality rises by 4.4 percent - concentrated among emergency and older patients - and life expectancy decreases by 0.28 statistical life years, with no evidence of offsetting gains in Switzerland. These results highlight that nurse scarcity shapes hospital production and widens health disparities across patients and regions.