Wage policy in the health care sector: A panel data analysis of nurses' labour supply

Jan Erik Askildsen, Badi H. Baltagi, Tor Helge Holmås

Research output: Contribution to journalArticlepeer-review

30 Scopus citations


Shortage of nurses is a problem in several countries. It is an unsettled question whether increasing wages constitute a viable policy for extracting more labour supply from nurses. In this paper we use a unique matched panel data set of Norwegian nurses covering the period 1993-1998 to estimate wage elasticities. The data set includes detailed information on 19 638 individuals over 6 years totalling 69 122 observations. The estimated wage elasticity after controlling for individual heterogeneity, sample selection and instrumenting for possible endogeneity is 0.21. Individual and institutional features are statistically significant and important for working hours. Contractual arrangements as represented by shift work are also important for hours of work, and omitting information about this common phenomenon will underestimate the wage effect.

Original languageEnglish (US)
Pages (from-to)705-719
Number of pages15
JournalHealth Economics
Issue number9
StatePublished - Sep 1 2003
Externally publishedYes


  • Labour supply
  • Nurses
  • Panel data
  • Selection
  • Semi-parametric models

ASJC Scopus subject areas

  • Health Policy

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