Nurses wanted: Is the job too harsh or is the wage too low?

Abstract

When entering the job market, nurses choose among different kind of jobs. Each of these jobs is characterized by wage, sector (primary care or hospital) and shift (daytime work or shift). This paper estimates a multi-sector-job-type random utility model of labor supply on data for Norwegian registered nurses (RNs) in 2000. The empirical model implies that labor supply is rather inelastic; 10% increase in the wage rates for all nurses is estimated to yield 3.3% increase in overall labor supply. This modest response shadows for much stronger inter-job-type responses. Our approach differs from previous studies in two ways: First, to our knowledge, it is the first time that a model of labor supply for nurses is estimated taking explicitly into account the choices that RN's have regarding work place and type of job. Second, it differs from previous studies with respect to the measurement of the compensations for different types of work. So far, it has been focused on wage differentials. But there are more attributes of a job than the wage. Based on the estimated random utility model we therefore calculate the expected value of compensation that makes a utility maximizing agent indifferent between types of jobs, here between shift work and daytime work. It turns out that Norwegian nurses working shifts may be willing to work shift relative to daytime work for a lower wage than the current one.Nurse labor supply Multi-sector Shift-work