Registered nurses (RNs) employed in hospitals realize a large wage advantage relative to RNs employed elsewhere. Cross-sectional estimates indicate a hospital RN wage advantage of roughly 20%. This paper examines possible sources of the hospital premium, a topic of some interest given the current shifting of medical care out of hospitals. Longitudinal analysis of Current Population Survey data for 1979–94 suggests that a third to a half of the advantage is due to unmeasured worker ability, and the authors conclude that the remainder of the advantage probably reflects compensating differentials for hospital disamenities. Supporting these conclusions is evidence that hospital RNs have higher cognitive ability and higher-quality job experience than non-hospital RNs, and indications that shift work accounts for roughly 10% of the hospital premium.
Get full access to this article
View all access options for this article.
References
1.
AdamacheKillard W., and SloanFrank A.. 1982. “Unions and Hospitals: Some Unresolved Issues.”Journal of Health Economics, Vol. 1, No. 1 (May), pp. 81–108.
2.
BootonLavone A., and LaneJulia I.. 1985. “Hospital Market Structure and the Return to Nursing Education.”Journal of Human Resources, Vol. 20, No. 2 (Spring), pp. 184–96.
3.
BriderPatricia. 1996. “Huge Job-Loss Projections Shock Health Professions.”American Journal of Nursing, Vol. 96, No. 1 (January), pp. 61, 64.
4.
BrownCharles, and MedoffJames. 1989. “The Employer Size-Wage Effect.”Journal of Political Economy, Vol. 97, No. 5 (October), pp. 1027–59.
5.
CainGlen G.BeckerBrian E.McLaughlinCatherine G., and SchwenkAlbert E.. 1981. “The Effect of Unions on Wages In Hospitals.” In EhrenbergRonald, ed., Research in Labor Economics, Vol. 4. Greenwich, Conn.: JAI Press, pp. 191–320.
6.
CawleyJohnConneelyKarenHeckmanJames, and VytlacilEdward. 1996. “Measuring the Effects of Cognitive Ability.” National Bureau of Economic Research Paper No. 5645 (July).
7.
CurranConnie R.MinnickAnn, and MossJoan. 1987. “Who Needs Nurses?”American Journal of Nursing, Vol. 87, No. 3 (March), pp. 444–47.
8.
DuMondJ. MichaelHirschBarry T., and MacPhersonDavid A.. 1996. “Wage Differentials Across Labor Markets and Workers: Does Cost of Living Matter?”Florida State University, Department of Economics, Working Paper 96-08-1.
9.
FeldmanRoger, and SchefflerRichard. 1982. “The Union Impact on Hospital Wages and Fringe Benefits.”Industrial and Labor Relations Review, Vol. 35, No. 2 (January), pp. 196–206.
10.
GibbonsRobert, and KatzLawrence F.. 1992. “Does Unmeasured Ability Explain Inter-Industry Wage Differentials?”Review of Economic Studies, Vol. 59, No. 3 (July), pp. 515–35.
11.
GroshenErica L., and KruegerAlan B.. 1990. “The Structure of Supervision and Pay in Hospitals.”Industrial and Labor Relations Review, Vol. 43, No. 3 (February), pp. 134S–146S.
12.
HirschBarry T., and MacPhersonDavid A.. 1996. Union Membership and Earnings Data Book: Compilations from the Current Population Survey. Washington, D.C.: Bureau of National Affairs.
13.
HirschBarry T., and SchumacherEdward J.. 1995. “Monopsony Power and Relative Wages in the Labor Market for Nurses.”Journal of Health Economics, Vol. 14, No. 4 (November), 443–76.
14.
HirschBarry T., and SchumacherEdward J.. Forthcoming. “Union Wages, Rents, and Skills in Health Care Labor Markets.”Journal of Labor Research.
15.
HwangHaeshinReedRobert W., and HubbardCarlton. 1992. “Compensating Wage Differentials and Unobserved Productivity.”Journal of Political Economy, Vol. 100, No. 4 (August), pp. 835–58.
16.
JakubsonGeorge. 1991. “Estimation and Testing of the Union Wage Effect Using Panel Data.”Review of Economic Studies, Vol. 58, No. 5 (October), pp. 971–91.
17.
KostiukPeter F.1990. “Compensating Differentials for Shift Work.”Journal of Political Economy, Vol. 98, No. 5, Pt. 1 (October), pp. 1054–75.
18.
LehrerEvelyn L.WhiteWilliam D., and YoungWendy B.. 1991. “The Three Avenues to a Registered Nurse License: A Comparative Analysis.”Journal of Human Resources, Vol. 26, No. 2 (Spring), pp. 262–79.
19.
LevyFrank, and MurnaneRichard J.. 1992. “U.S. Earnings Levels and Earnings Inequality: A Review of Recent Trends and Proposed Explanations.”Journal of Economic Literature, Vol. 30, No. 3 (September), pp. 1333–81.
20.
LinkCharles R.1988. “Returns to Nursing Education: 1970–84.”Journal of Human Resources, Vol. 23, No. 3 (Summer), pp. 372–87.
21.
MacPhersonDavid A., and HirschBarry T.. 1995. “Wages and Gender Composition: Why Do Women's Jobs Pay Less?”Journal of Labor Economics, Vol. 13, No. 3 (July), pp. 426–71.
22.
MellowWesley. 1983. “Employer Size, Unionism, and Wages.” In EhrenbergRonald, ed., Research in Labor Economics, Supplement 2. Greenwich, Conn.: JAI Press, pp. 253–82.
23.
MincerJacob. 1983. “Union Effects: Wages, Turnover, and Job Training.” In EhrenbergRonald, ed., Research in Labor Economics, Supplement 2. Greenwich, Conn.: JAI Press, pp. 217–52.
24.
NealDerek A., and JohnsonWilliam R.. 1996. “The Role of Premarket Factors in Black-White Wage Differences.”Journal of Political Economy, Vol. 104, No. 5 (October), pp. 869–95.
25.
PeracchiFranco, and WelchFinis. 1995. “How Representative Are Matched Cross Sections? Evidence from the Current Population Survey.”Journal of Econometrics, Vol. 68, No. 1 (July), pp. 153–80.
26.
PolivkaAnne E., and RothgebJennifer M.. 1993. “Overhauling the Current Population Survey: Re-designing the Questionnaire.”Monthly Labor Review, Vol. 116 (September), pp. 10–28.
27.
ReillyKevin T.1995. “Human Capital and Information: The Employer Size-Wage Effect.”Journal of Human Resources, Vol. 30, No. 1 (Winter), pp. 1–18.
28.
U.S. Department of Labor, Bureau of Labor Statistics. 1995. Occupational Injuries and Illnesses: Counts, Rates, and Characteristics, 1992. Washington, D.C.: GPO, April.
29.
U.S. Department of Labor, Employment and Training Administration. 1993. Selected Characteristics of Occupations Defined in the Revised Dictionary of Occupational Titles. Washington, D.C.: GPO.
30.
WeissAndrew. 1990. Efficiency Wages: Models of Unemployment, Layoffs, and Wage Dispersion. Princeton: Princeton University Press.
