Will Increased Wages Reduce Shortage of Nurses? A Panel Data Analysis of Nurses' Labour Supply
Jan Erik Askildsen
University of Bergen - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute for Economic Research)
Badi H. Baltagi
Syracuse University - Maxwell School of Citizenship and Public Affairs; Institute for the Study of Labor (IZA)
Tor Helge Holmas
University of Bergen - Department of Economics
CESifo Working Paper Series No. 794
Shortage of nurses is a problem in several countries. It is an unsettled question whether increasing wages constitute a viable policy for extracting more labour supply from nurses. In this paper we use a unique matched panel data set of Norwegian nurses covering the period 1993-1998 to estimate wage elasticities. The data set includes detailed information on 19,638 individuals over 6 years totalling 69,122 observations. The estimated wage elasticity after controlling for individual heterogeneity, sample selection and instrumenting for possible endogeneity is 0.21. Individual and institutional features are statistically significant and important for working hours. Contractual arrangements as represented by shift work are also important for hours of work, and omitting information about this common henomenon will underestimate the wage effect.
Number of Pages in PDF File: 36
Keywords: Nurses, Labour Supply, Panel Data, Selection, Semi-parametric Models
JEL Classification: I10, J22, J44working papers series
Date posted: November 11, 2002
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