Will Increased Wages Reduce Shortage of Nurses? A Panel Data Analysis of Nurses' Labour Supply

Askildsen, Jan Erik; Baltagi, Badi H.; Holmas, Tor Helge

doi:10.2139/ssrn.348422

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Will Increased Wages Reduce Shortage of Nurses? A Panel Data Analysis of Nurses' Labour Supply

36 Pages Posted: 11 Nov 2002

See all articles by Jan Erik Askildsen

Jan Erik Askildsen

University of Bergen - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Badi H. Baltagi

Syracuse University; CESifo (Center for Economic Studies and Ifo Institute); IZA Institute of Labor Economics

Tor Helge Holmas

University of Bergen - Department of Economics

Date Written: October 2002

Abstract

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.

Keywords: Nurses, Labour Supply, Panel Data, Selection, Semi-parametric Models

JEL Classification: I10, J22, J44

Suggested Citation: Suggested Citation

Askildsen, Jan Erik and Baltagi, Badi H. and Holmas, Tor Helge, Will Increased Wages Reduce Shortage of Nurses? A Panel Data Analysis of Nurses' Labour Supply (October 2002). Available at SSRN: https://ssrn.com/abstract=348422 or http://dx.doi.org/10.2139/ssrn.348422