It’s not the money: it’s the progression

Nurses care more about upward movement than the wage rate

There are plenty of human resources executives who know in their hearts that money isn’t what drives nurses to work. What has more impact than the actual wage rate is the ability for nurses to progress over time up a wage scale. According to a study published in the June issue of Health Policy, a flat wage structure and the relative quickness over the course of a career at which a nurse working at the bedside can max out his or her salary can drive nurses out of the profession. Entering the work force after college at $35,000 per year may look great. But topping out at less than $50,000 isn’t so attractive.

"There is a problem here," says Charles Link, PhD, a professor in the department of economics at the University of Delaware in Newark. Link co-authored the study with Yvana Chiha, PhD, an economist and litigation consultant at Resolution Economics in Beverly Hills, CA. "Nurses start out at a relatively high wage rate, but it stays constant," explains Link. "People like to have an incentive — to think they can get promoted and move into a different class of job. It is about both recognition and movement upward in terms of wages."

Link and Chiha looked at 40 years of data to determine what role wages play in getting existing RNs to stay in the work force and the number of hours they worked while in it. Marital status of nurses has a small impact on the probability a nurse will work and the hours she gives to the workplace, according to the study. Data surveys suggest that increases in wages for married nurses can lead to fewer hours worked — although the effect isn’t statistically significant in most years the authors studied. For single nurses, there is no statistically significant impact until 2000, but even then, the study states, the impact is small — 0.2. That means that a 10% change in the wage would lead to a 2% change in the hours worked.

What does have an impact on whether an RN works a lot, or works at all, is whether she — the data in this instance relate solely to women — is the only earner in the household. And in this case, the impact is statistically significant. As family income from non-RN earnings rise, the RN works fewer hours. In 1996, the data show that a $1,000 increase in family income decreases the probability a nurse will work from 93.45% to 93.26%, and the hours worked declines by about eight per year. It seems small, note the authors, but it still is significant.

The study also suggests that whether there are children at home also has an impact on the working status of RNs: More children younger than 6 means less chance the nurse will work and, if she does, fewer hours worked. Having children under age 6 in 2000 meant that a nurse only had a 79% probability of working and worked 1,316 hours per year. If the children were older than age 6, the chance of being in the work force in 2000 increased to 91%, and the hours worked increased to 1,552.

Not surprisingly, having young children in the house doesn’t affect male nurses. The average number of hours worked for men is more than 1,900 per year — compared to female nurses who worked 1,670 if married and 1,860 if single. It certainly makes hiring more male nurses seem more appealing.

"I think changing the image men have about nursing could have a big impact on the future supply of nurses," says Chiha. They already have a higher participation rate at RNs than their female counterparts once qualified — according to the study men participated at a rate of 90% in the work force, compared to 83.9% for married women nurses.

Diversity in terms of race also may help hospitals get more working hours out of their RNs. According to the study, African-American women worked about 100 more hours per year than their white counterparts.

Getting them in the door

Unlike nurses already in the profession, wages do play a part in attracting students to nursing in the first place. But in an era where women have more career choices than just nursing, and where – at least until recently — the options for lucrative careers for anyone seemed various, starting salaries for nurses may become a key factor in getting enough people interested in nursing to deal with the current shortage and stave off future ones.

Median Salary by Experience for Industry = Nursing

"Wages had an effect on the number of people admitted into nursing programs between the 1960s and 1996," Link says. "They choose nursing based on wages. If you look at wages associated with starting salaries in the society at large, the higher they are, the fewer people choose to go into nursing."

The message that Link and Chiha want hospitals to take home from their study is that working conditions matter a lot more to existing nurses than wages. If nurses leave to have children, then negating the impact of having those young children by providing child care could entice some of those women back to work, Link says. It might be a small effect — most RNs work already. But when you are talking about half a million nurses with small children, getting a few thousand back into the work force could have a significant impact in communities and individual hospitals.

If a hospital wants existing nurses to stay on the job, they have to do something to keep them motivated. That means having some promotional path at the bedside, says Link. They shouldn’t have to move into administration to increase their wages. "When they first enter the workforce, they are very motivated," Chiha concludes. "But after 20 years, with such hard working conditions, why should they stay? You have to give them a reason."


1. Chiha YA, Link CR. The shortage of registered nurses and some new estimates of the effects of wages on registered nurses labor supply: A look at the past and a preview of the 21st century. Health Policy 2003 Jun; 64(3):349-75.


• Yvana Chiha, PhD, Economist and Litigation Consultant, Resolution Economics, 9250 Wilshire Blvd., Suite 400, Beverly Hills, CA 90212. Telephone: (310) 860-9062.

• Charles R. Link, PhD, Professor of Business, Department of Economics, University of Delaware, Newark, DE 19716. Telephone: (302) 831-1921.