Addressing Nurse Shortages: What can Policy Makers Learn from the Econometric Evidence on Nurse Labour Supply?

The main finding is that, at least in the short-run, RN labour supply appears to be fairly unresponsive to wage changes, which points to the importance of non-pecuniary job aspects in influencing labour supply.

Abstract

This paper provides a detailed review of the international studies that have used formal econometric models to investigate the labour supply decision of Registered Nurses (RNs). The main finding is that, at least in the short‐run, RN labour supply appears to be fairly unresponsive to wage changes. Consequently, even large wage increases are unlikely to be successful in tackling current and predicted nurse shortages. This finding points to the importance of non‐pecuniary job aspects in influencing labour supply. However, the paper concludes by arguing that these empirical findings should be viewed with some caution given both theoretical and econometric limitations.