Cut to the Bone? Hospital Takeovers and Nurse Employment Contracts / Janet Currie, Mehdi Farsi, W. Bentley MacLeod.

Format:

Book

Author/Creator:

Currie, Janet.

Contributor:

Farsi, Mehdi.

MacLeod, W. Bentley.

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w9428.

NBER working paper series no. w9428

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2003.

Summary:

This paper uses data from the 1990s to examine changes in the wages, employment, and effort of nurses in California hospitals following takeovers by large chains. The market for nurses has been described as a classic monopsony, so that one might expect increases in firm market power to be associated with declines in wages. However, we show that if one extends the monopsony model to consider effort, or if we apply a basic contracting model to the data, then we would expect to see effects on effort rather than on wages. This prediction is bourne out by the data nurses see few declines in wages following takeovers, but see increases in the number of patients per nurse, our measure of effort. We also find that these changes are similar in the largest for-profit and non-profit chains, suggesting that market forces are more more important than institutional form.

Notes:

January 2003.

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