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Title:Classic Monopsony or New Monopsony? : Searching for Evidence in Nursing Labor Markets PDF Logo
Authors:Schumacher, Edward J.
Hirsch, Barry T.
Issue Date:2004
Series/Report no.:IZA Discussion paper series 1154
Abstract:The market for hospital registered nurses (RNs) is often offered as an example of ?classic? monopsony, while a ?new? monopsony literature emphasizes firm labor supply being upwardsloping for reasons other than market structure. Using data from several sources, we explore the relationship between wages and measures of classic and new monopsony. Micro wage data for 1993-2002 provide little evidence of classic monopsonistic outcomes in the long run, the relative wages of RNs in 240 U.S. labor markets being largely uncorrelated with market size or employer concentration. A short-run relationship is found, with RN wages declining in markets with increased hospital system concentration. Measures of new monopsony use data on mobility to proxy inverse supply elasticities. No relationship is found between these measure and nursing wages, but evidence supporting new monopsony is found for women elsewhere in the labor market. RNs display greater inter-employer mobility than do women (or men) in general. Two conclusions follow. First, evidence of upward sloping labor supply need not imply monopsonistic outcomes. Second, nursing should not be held up as a prototypical example of monopsony.
Subjects:monopsony
nurses
wages
hospitals
JEL:J30
I10
J42
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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