Skip navigation
Please use this identifier to cite or link to this item:
Title: Hospital Consolidation and Monopsony Power: The Effect of Mergers on the Labor Market for Nurses
Authors: Miller, Katherine
Advisors: Ashenfelter, Orley C.
Department: Economics
Class Year: 2016
Abstract: This paper explores the effect of local hospital mergers on the labor force for Registered Nurses (RNs) and Licensed Vocational Nurses (LVNs). Using data from the American Hospital Association’s (AHA) Annual Survey and the Occupational Employment Statistics (OES) Survey from 2004-2014, two analyses were conducted: (1) studies the effect of local mergers on the concentration of employment of RNs and LVNs, and (2) estimates the effect of the change in concentration of employment of RNs and LVNs on the change in their employment and wages. Using the Herfindahl-Hirschman Index (HHI) to measure employment concentration, the results indicate that local mergers are associated with an increase in labor market concentration by roughly 650 index points for RNs and 680 index points for LVNs. Estimated employment effects were negligible for both groups. A small negative wage effect was observed for RNs, and a small positive wage effect for LVNs. A 1,000 index point increase in the HHI of employment was estimated to correspond with a 0.5 percent decrease in real wages of RNs, and a 0.2 percent increase for LVNs. Though the results are not entirely conclusive based on the small size of the estimated effects, they present some evidence that mergers enable hospitals to increase their monopsony power in the labor market for RNs.
Extent: 73 pages
Type of Material: Princeton University Senior Theses
Language: en_US
Appears in Collections:Economics, 1927-2016

Files in This Item:
File SizeFormat 
Economics_Senior_Thesis_Submission_Click_Here_To_Submit_kbm2_attempt_2016-04-13-09-15-37_Miller_Katherine.pdf2.36 MBAdobe PDF    Request a copy

Items in Dataspace are protected by copyright, with all rights reserved, unless otherwise indicated.