There is alleged to be a severe nursing shortage in Canada. While the shortage is attributed in large part to fiscal restraint in the hospital sector in the early 1990s, there are competing claims addressing why nursing employment levels changed over this period. Supply-side proponents argue that deteriorating working conditions and stagnant wages led nurses to voluntarily leave the profession, province, or country for better employment prospects. Demand-side proponents argue that hospitals reduced staff levels in response to a decline in inpatient utilization. There is also considerable disagreement on what impact, if any, reduced nursing employment levels had on access to hospital care. However, while there is no shortage of anecdotal evidence and plausible rhetoric, the debate is being carried out in a largely data-free environment. This thesis attempts partially to fill this void. Part I of this thesis examines trends in the nursing employment level in Canada over the hospital restructuring period. Results indicate that the number of nurses employed in hospitals decreased significantly during the cut-backs period and that the decrease was particularly severe among young nurses. The employment level is decomposed into three separate components for each age group: the change in the potential supply of nurses, the change in the employment rate of this group and the change in the likelihood that an individual will work in the nursing profession conditional on being employed. Results indicate that the third factor is most important. To determine whether the observed shift toward non-nursing employment was voluntary, an occupational sector choice model is developed and the pattern of nursing wages, non-nursing wages, and hospital expenditure (a proxy for demand) is examined. The evidence strongly suggests that the reduction in the nursing employment level in hospitals during the downsizing period was a result of a decrease in the demand for nursing labour and did not represent voluntary movement out of the nursing sector. That the decrease in demand primarily affected young nurses appears to reflect the influence of seniority in the highly unionized nursing sector.

There is alleged to be a severe nursing shortage in Canada. While the shortage is attributed in large part to fiscal restraint in the hospital sector in the early 1990s, there are competing claims addressing why nursing employment levels changed over this period. Supply-side proponents argue that deteriorating working conditions and stagnant wages led nurses to voluntarily leave the profession, province, or country for better employment prospects. Demand-side proponents argue that hospitals reduced staff levels in response to a decline in inpatient utilization. There is also considerable disagreement on what impact, if any, reduced nursing employment levels had on access to hospital care. However, while there is no shortage of anecdotal evidence and plausible rhetoric, the debate is being carried out in a largely data-free environment. This thesis attempts partially to fill this void. Part I of this thesis examines trends in the nursing employment level in Canada over the hospital restructuring period. Results indicate that the number of nurses employed in hospitals decreased significantly during the cut-backs period and that the decrease was particularly severe among young nurses. The employment level is decomposed into three separate components for each age group: the change in the potential supply of nurses, the change in the employment rate of this group and the change in the likelihood that an individual will work in the nursing profession conditional on being employed. Results indicate that the third factor is most important. To determine whether the observed shift toward non-nursing employment was voluntary, an occupational sector choice model is developed and the pattern of nursing wages, non-nursing wages, and hospital expenditure (a proxy for demand) is examined. The evidence strongly suggests that the reduction in the nursing employment level in hospitals during the downsizing period was a result of a decrease in the demand for nursing labour and did not represent voluntary movement out of the nursing sector. That the decrease in demand primarily affected young nurses appears to reflect the influence of seniority in the highly unionized nursing sector. / Arts, Faculty of / Vancouver School of Economics / Graduate