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Underpaid or Overpaid? Wage Analysis for Nurses Using Job and Worker Attributes

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  • Hirsch, Barry

    (Georgia State University)

  • Schumacher, Edward J.

    (Trinity University)

Abstract

The nursing labor market presents an apparent puzzle. Hospitals report chronic shortages, yet standard wage analysis shows that nursing wages have increased over time and greatly exceed those received by other college-educated women. This paper addresses this puzzle. Data from the Current Population Survey (CPS) are matched with detailed job content descriptors from the Occupational Information Network (O*NET). Nursing jobs require higher levels of skills and more difficult working conditions than do jobs for other college educated workers. A standard CPS-only wage regression shows a registered nurse (RN) wage advantage of .22 log points compared to a pooled male/female group of college-educated workers. Control for O*NET job attributes reduces the RN gap to .08, while an arguably preferable nonparametric estimator produces a wage gap estimate close to zero. We conclude that nurses receive compensation close to long-run opportunity costs, narrowing if not resolving the RN wage-shortage puzzle.

Suggested Citation

  • Hirsch, Barry & Schumacher, Edward J., 2008. "Underpaid or Overpaid? Wage Analysis for Nurses Using Job and Worker Attributes," IZA Discussion Papers 3833, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp3833
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    Cited by:

    1. Kroczek, Martin & Koch, Andreas, 2024. "The reaction of wages to skill shortage in nursing," VfS Annual Conference 2024 (Berlin): Upcoming Labor Market Challenges 302406, Verein für Socialpolitik / German Economic Association.
    2. John T. Addison & Orgul D. Ozturk & Si Wang, 2018. "The Occupational Feminization of Wages," ILR Review, Cornell University, ILR School, vol. 71(1), pages 208-241, January.
    3. Edward J. Schumacher, 2011. "Foreign‐born nurses in the US labor market," Health Economics, John Wiley & Sons, Ltd., vol. 20(3), pages 362-378, March.
    4. Matthew Freedman & Yoonjung Kim, 2022. "Quasi‐Experimental Evidence on the Effects of Expanding Cash Welfare," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 41(3), pages 859-890, June.

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    More about this item

    Keywords

    job attributes; wage differentials; nursing;
    All these keywords.

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations

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