TY  - JOUR
AU  - Currie,Janet
AU  - Farsi,Mehdi
AU  - MacLeod,W. Bentley
TI  - Cut to the Bone? Hospital Takeovers and Nurse Employment Contracts
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 9428
PY  - 2003
Y2  - January 2003
UR  - http://www.nber.org/papers/w9428
L1  - http://www.nber.org/papers/w9428.pdf
N1  - Author contact info:
Janet Currie
Princeton University
316 Wallace Hall
Princeton, NJ 08544
Tel: 609-258-7393
Fax: 609-258-5974
E-Mail: jcurrie@princeton.edu

W. Bentley MacLeod
Department of Economics
Columbia University
420 West 118th Street, MC 3308
New York, NY 10027
Tel: 310-571-5083
Fax: 212/854-4782
E-Mail: bentley.macleod@columbia.edu
AB  - This paper uses data from the 1990s to examine changes in the wages, employment, and effort of nurses in California hospitals following takeovers by large chains. 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, we show that if one extends the monopsony model to consider effort, or if we apply a basic contracting model to the data, then we would expect to see effects on effort rather than on wages. This prediction is bourne out by the data   nurses see few declines in wages following takeovers, but see increases in the number of patients per nurse, our measure of effort. We also find that these changes are similar in the largest for-profit and non-profit chains, suggesting that market forces are more more important than institutional form.
ER  -