Investigating the Quitting Decision of Nurses: Panel Data Evidence from the British National Health Service

28 Pages Posted: 24 Jul 2003

See all articles by Paul Frijters

Paul Frijters

Queensland University of Technology - School of Economics and Finance

Michael A. Shields

University of Melbourne - Department of Economics; IZA Institute of Labor Economics

Stephen Wheatley Price

University of Leicester - Department of Economics; IZA Institute of Labor Economics

Date Written: June 2003

Abstract

There is currently a worldwide shortage of registered nurses, driven by large shifts in both the demand for and supply of nurses. Consequently, various policies to increase the recruitment and retention of nurses are under discussion, in particular, the role that wage increases might have in promoting nurse labour supply. In this paper we provide the first detailed empirical investigation into the quitting behaviour of nurses in the British National Health Service (NHS), using a newly constructed longitudinal survey. We fit both single and competing-risks duration models that enable us to establish the characteristics of those nurses who leave the NHS, distinguish the importance of pay in this decision and document the destinations that nurses move to. Contrary to expectations, we find that the hourly wage received by nurses outside of the NHS is around 20% lower than in the NHS, and that hours of work are about the same. However, there is a clear movement away from shift work. Age, seniority, job and employer characteristics are all found to be important predictors of nurses leaving the NHS. However, whilst the effect of wages is found to be statistically significant, the predicted impact of an increase in nurses' pay on retention rates is small. Our main conclusion, therefore, is that the current nurse shortages in the NHS will not be eliminated through substantially increased pay. Rather employers need to identify and address other aspects of the job which are driving nurses' decisions to quit the NHS.

Keywords: Nurses, Panel Data, Wages, Hours, Quitting, NHS

JEL Classification: J45, J63, I18

Suggested Citation

Frijters, Paul and Shields, Michael A. and Wheatley Price, Stephen, Investigating the Quitting Decision of Nurses: Panel Data Evidence from the British National Health Service (June 2003). IZA Discussion Paper No. 794. Available at SSRN: https://ssrn.com/abstract=418642

Paul Frijters

Queensland University of Technology - School of Economics and Finance ( email )

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Australia
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HOME PAGE: http://www.bus.qut.edu.au/paulfrijters/index.jsp

Michael A. Shields (Contact Author)

University of Melbourne - Department of Economics ( email )

Victoria 3010, 3010
Australia
+61 3 8344 4656 (Phone)
+61 3 8344 6899 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
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Germany

Stephen Wheatley Price

University of Leicester - Department of Economics ( email )

New Building 325
Leicester LE1 7RH
United Kingdom
+0116 252 5645 (Phone)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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