published in: Health Economics, 2007, 16 (1), 57-74
There is currently a worldwide shortage of registered nurses, driven by large shifts in both the
demand for and supply of nurses. Consequently, various policies to increase the recruitment
and retention of nurses are under discussion, in particular, the role that wage increases might
have in promoting nurse labour supply. In this paper we provide the first detailed empirical
investigation into the quitting behaviour of nurses in the British National Health Service
(NHS), using a newly constructed longitudinal survey. We fit both single and competing-risks
duration models that enable us to establish the characteristics of those nurses who leave the
NHS, distinguish the importance of pay in this decision and document the destinations that
nurses move to. Contrary to expectations, we find that the hourly wage received by nurses
outside of the NHS is around 20% lower than in the NHS, and that hours of work are about
the same. However, there is a clear movement away from shift work. Age, seniority, job and
employer characteristics are all found to be important predictors of nurses leaving the NHS.
However, whilst the effect of wages is found to be statistically significant, the predicted
impact of an increase in nurses’ pay on retention rates is small. Our main conclusion,
therefore, is that the current nurse shortages in the NHS will not be eliminated through
substantially increased pay. Rather employers need to identify and address other aspects of
the job which are driving nurses’ decisions to quit the NHS.
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