Monopsony’ in the Market for Nurses? A Semiparametric Note

Despite shortage, labor market for registered nurses is often considered as an example of monopsony. A series of empirical papers examine the validity of this ‘monopsony power’ argument and investigate any possibility of ‘monopsonistic exploitation’ in such market. The exploitation can be viewed from different angles – salary or workload. High concentration of the hospitals (leading to monopsony or oligopsony) in the local areas as well as low mobility of the nurses across jobs are claimed to give rise to such exploitation. Exploitation, if present, can aggravate the problem of shortage because a high turnover rate is also observed in such labor market. This paper uses semiparametric regression to examine the ‘monopsonistic exploitation’ argument from the view points of registered nurses’ salary as well as work load and finds only limited support in favor of the exploitation argument. Hospital concentration does not seem to cause any problem as far ‘exploitation’ motive is concerned. However, lack of mobility on part of the nurses seems to impact their salary or work load.