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Can Human Capital Theory Explain why Nurses are so Poorly Paid?
Author(s) -
Nowak Margaret J.,
Preston Alison C.
Publication year - 2001
Publication title -
australian economic papers
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.351
H-Index - 15
eISSN - 1467-8454
pISSN - 0004-900X
DOI - 10.1111/1467-8454.00124
Subject(s) - disequilibrium , earnings , human capital , wage , economic shortage , power (physics) , health professionals , labour economics , economics , business , census , demographic economics , health care , medicine , finance , economic growth , government (linguistics) , population , linguistics , philosophy , physics , environmental health , quantum mechanics , ophthalmology
This paper uses Australian Census data to examine the earnings of female professionals. Comparisons are made between Registered Nurses (RNs), Teachers, Social Professionals, Health Professionals and Business Professionals. Wage decompositions show that RNs earn significantly less than other female Professionals and that the observed differentials can not be explained by differences in human capital endowments. The evidence presented is strongly suggestive of monopsonist or oligopsonist power in the setting of nurse wages – with a manifestation being persistent labour market disequilibrium. Changing the relative reward structure for nurses may help address the on‐going nursing ‘shortage’ in Australia, although further research in this area is called for.