Explanations for Persistent Nursing Shortages

Abstract

This paper contributes to the economics literature on nursing market shortages by putting forward two new models that suggest three new explanations for perceived nursing shortages. The first model focuses on hospitals hiring both permanent staff nurses and temporary contract nurses. It shows that hiring both classes of nurses can represent optimizing behavior, and that an interesting kind of perceived nursing shortage results from this dual hiring. The second model posits two classes of hospitals, "premier" and "funds-constrained," and generates two distinct kinds of nursing shortages: economic shortages, involving unfilled, budgeted positions, and "noneconomic" professional standards shortages. We believe that the perceived existence of professional standards shortages may be a significant explanation for the widespread impression of persistent shortages.