NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Monopsony Power in the Market for Nurses

Daniel Sullivan

NBER Working Paper No. 3031*
Issued in July 1989
NBER Program(s):   LS

Estimates are presented of the inverse elasticity of supply of nursing

services to the individual hospital, a quantity which is a natural measure of

employer market power. The estimates corresponding to employment changes

taking place over one year are quite high (in the neighborhood of 0.79) and

even for changes taking place over three years are substantial (in the

neighborhood of 0.26). The estimates do not significantly differ for hospitals

in major metropolitan areas and do not depend very sensitively on the assumed

form of the oligopsony equilibrium.

*Published: Journal of Law Economics, vo. 32, no.2 part 2, pp. s135-s178, October 1989.

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