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.

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In 2000, 79 percent of married Canadian women between the ages of 25 and 44 were in the labour force and 75 percent were employed.1 Many Canadian families with working parents use costly child-care, and many of these families take advantage of the child-care expense deduction (CCED): in 1998, 71 percent of families with pre-school children used child-care services to work or study at a given point in time,2 and 868,460 taxfilers reported nearly $2.4 billion in child-care expenditures on 1,390,200 children.3 In this thesis, I examine the effects of parental labour supply and child-care use on children, the impacts that child-care costs have on the labour supply of married mothers, and the fairness of the tax system with respect to child-care costs. Chapters I, and V are introductory and concluding chapters, respectively. In chapter II, I consider the question of whether parental labour supply and child-care use affect child cognitive and behavioural outcomes. Parental labour supply reduces the amount of time parents have for their children. On the other hand, parents can replace their own time with child-care services and can also purchase more market goods with additional income earned at work. I examine this question using the first three cycles of the National Longitudinal Survey of Children and Youth (NLSCY), which provide both a large sample size and a rich source of data, including controls for parenting skills. The possible joint detennination of labour supply and child outcomes is also tested. In chapter III, I estimate the impact of child-care costs on the return to work of married Canadian women with children under three, using data from the 1988 Canadian National Childcare Survey (CNCCS) and Labour Market Activity Survey (LMAS). Data from the 1995 Canadian General Social Survey indicate that Canadian mothers have split views on the issue of whether parental labour supply has deleterious effects on child outcomes. Furthermore, women's views on these issues tend to be consistent with their labour supply, suggesting their views may affect whether they choose to work or not. If women's preferences for work are based on thenviews and are correlated with other explanatory variables such as education and cost of care, the estimated coefficients on these explanatory variables will be biased. In order to allow for these potential differences in responsiveness to childcare costs, I estimate separate models where current or previous occupation and weeks worked in the previous 12 months are used as control variables in the estimation to account for heterogeneity of preferences. In chapter IV of the thesis, I use data from the CNCCS and LMAS to examine the vertical and horizontal equity of the CCED. Vertical equity is evaluated by comparing CCED benefit rates for different family levels of earnings. This is done for dual earner families with childcare costs and similar characteristics. Horizontal equity is examined by investigating whether the existence of the CCED increases or decreases the difference between effective tax rates of families with similar earnings but different labour supplies. I use measures of actual and potential earnings to evaluate both vertical and horizontal equity. / Arts, Faculty of / Vancouver School of Economics / Graduate

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

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This study investigates a broad range of factors which might be thought to influence the employment earnings of Canadian males. Micro-data drawn from the 1971 census are analysed, using as a frame of reference the human-capital model derived, and implemented for the United States, by Jacob Mincer. Opening discussion furnishes a detailed critique of the model itself, and of the auxiliary hypotheses required to make it perform empirically. Particular emphasis is laid upon the implicit assumption of perpetual long-run equilibrium and upon the neglect of variables arising on the demand side of the labour market. Generally, it is argued that although the human-capital paradigm may serve as a framework for empirical description, it is inadequate as a scientific theory because it fails to generate a wide array of hypotheses which are clearly susceptible to falsification. Earnings functions are estimated by ordinary least squares for a sample of almost 23,000 out-of-school males who worked, mainly in the private sector, at some time during 1970. Results yielded for Canada by the human-capital specification are compared with those reported by Mincer. The regressions are then expanded to include variables such as industry, region, and occupation, together with other personal attributes. These are found to rival the importance of the orthodox human-capital variables. Contrary to United States results, the elasticity of earnings with respect to weeks (or hours) worked is less than unity. In light of recent analyses which make human-capital investment and labour supply objects of simultaneous decision within a life-cycle context, further investigation is carried out using a simplified, two-equation, linear model in which earnings and hours are both endogenous. Estimates performed by the method of three-stage least squares indicate an elasticity of earnings with respect to hours considerably in excess of unity. However, within particular regional and industrial categories, wages and hours tend to be offsetting. Schooling coefficients, or "rates of return," fall in the 5.25-6.50% range. / Arts, Faculty of / Vancouver School of Economics / Graduate

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