Scandinavian Working Papers in Economics
Working Papers in Economics,
University of Bergen, Department of Economics
No 21/02: Will Increased Wages Reduce Shortage of Nurses? A Panel Data Analysis of Nurses’ Labour Supply
Jan Erik Askildsen (), Badi H. Baltagi () and Tor Helge Holmås ()
Additional contact information
Jan Erik Askildsen: Programme for Health Economics in Bergen, Department of Economics, University of Bergen, Postal: Hermann Fossgt. 6, N-5007 Bergen, Norway
Badi H. Baltagi: Texas A&M University, Department of Economics, Postal: College Station, Texas 77843-4228, USA.
Tor Helge Holmås: Programme for Health Economics in Bergen, Department of Economics, University of Bergen, Postal: Hermann Fossgt. 6, N-5007 Bergen, Norway
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 phenomenon will underestimate the wage effect.
Keywords: Nurses; labour supply; panel data; selection; semi-parametric models.
31 pages, October 15, 2002
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