Geographically differentiated pay in the labour market for nurses

Abstract

This novel application of spatial wage theory to health service labour markets analyses the competitiveness of nurse's pay and how this differs between local labour markets in Britain. A switching regression model is estimated to derive standardised spatial wage differentials (SSWDs) for nurses and their comparators. An SSWD gap is constructed and its relationship to vacancies estimated. A reduction in the gap in a local area is shown to result in an increase in the long-term vacancy rate for National Health Service (NHS) nurses. The competitiveness of nursing pay is shown to have a strong effect on the ability of the NHS to attract and retain nurses.