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Can pay regulation kill?: panel data evidence on the effect of labor markets on hospital performance

Propper, Carol and Van Reenen, John (2010) Can pay regulation kill?: panel data evidence on the effect of labor markets on hospital performance. Journal of Political Economy, 118 (2). pp. 222-273. ISSN 0022-3808

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Abstract

In many sectors, pay is regulated to be equal across heterogeneous geographical labor markets. When the competitive outside wage is higher than the regulated wage, there are likely to be falls in quality. We exploit panel data from the population of English hospitals in which regulated pay for nurses is essentially flat across the country. Higher outside wages significantly worsen hospital quality as measured by hospital deaths for emergency heart attacks. A 10 percent increase in the outside wage is associated with a 7 percent increase in death rates. Furthermore, the regulation increases aggregate death rates in the public health care system.

Item Type: Article
Official URL: http://www.jstor.org/action/showPublication?journa...
Additional Information: © 2010 Chicago Journals
Library of Congress subject classification: H Social Sciences > HB Economic Theory
R Medicine > RA Public aspects of medicine
Sets: Departments > Economics
Collections > Economists Online
Research centres and groups > Centre for Economic Performance (CEP)
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 12 Apr 2011 10:14
URL: http://eprints.lse.ac.uk/35246/

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