Cut to the Bone? Hospital Takeovers and Nurse Employment Contracts

Janet Currie, Mehdi Farsi and W. Bentley Macleod (wbmacleod@wbmacleod.net)

ILR Review, 2005, vol. 58, issue 3, 471-493

Abstract: The authors examine changes in the wages, employment, and effort of nurses in California hospitals following takeovers by large chains in the 1990s. 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, a basic contracting model predicts effects on effort rather than on wages, which is what this analysis finds: nurses experienced few declines in wages following takeovers, but did see increases in the number of patients per nurse, the measure of effort used here. The authors show that their results are also consistent with an extended version of the monopsony model that considers effort and allows for revenue shifts following a takeover. Finally, they find that these changes were similar in the largest for-profit and non-profit chains, suggesting that market forces are more important than institutional form.

Date: 2005
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/001979390505800309 (text/html)

Related works:
Working Paper: Cut to the Bone? Hospital Takeovers and Nurse Employment Contracts (2004)
Working Paper: Cut to the Bone? Hospital Takeovers and Nurse Employment Contracts (2003)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sae:ilrrev:v:58:y:2005:i:3:p:471-493

DOI: 10.1177/001979390505800309

Access Statistics for this article

More articles in ILR Review from Cornell University, ILR School
Bibliographic data for series maintained by SAGE Publications (sagediscovery@sagepub.com).