Nursing shortages are commonly observed features of hospital systems in Australia, Europe and the United States. To date there has been very little research on the effects of hospital characteristics on the retention of the nursing staff. In this paper we match individual data on registered nurses (RNs) working in the public sector in NSW in 1996 to the hospital in which they work. We analyze the annual retention probability for these RNs using the nurses? personal characteristics as well as the characteristics of the hospitals. It is found that the type of hospital per se does not help explain the retention probability of the nurses employed in the premise but the hospital characteristics do. Hospital characteristics include measures of size, complexity, intensity, expenditures and staffing levels. The results suggest that the effects of these variables are complex. For example, complexity of the work as measured by admissions from emergency increase retention while high cost procedures and large ANDRG weights reduce retention. Higher levels of expenditures (at constant staffing levels) increase retention except for expenditures on visiting medical officers which reduce retention. The effects on the expected retention probability are very large and significant. One implication of our findings is that simply increasing staffing levels is unlikely to achieve much impact on nurses? retention levels unless problem areas of the job are also addressed.Medical workforce
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