Do part-time/full-time compensation differentials for nurses vary between the private and public sector?

Abstract

This study examines whether, compared to their private sector counterparts, public sector health care employers are at a disadvantage using part-time (PT) nurses to lower labour costs. Findings reveal a lack of a PT wage differential. Public and Private sector PT nurses are less likely to receive health care and pension coverage compared with full-time (FT) nurses. Yet, these PT/FT nonwage compensation coverage differentials do not vary across sectors. The nonwage findings are interpreted as suggesting that public sector health care employers are just as likely as private sector health care employers to benefit from cost savings associated with lower nonwage coverage for PT nurses.

Acknowledgements

The authors are grateful for the suggestions and comments of Susan Donohue-Davies, Scott Drewianka, Alan Levy and Richard Perlman.

Notes

¹Nurses’ large share of the health care workforce also depicts a cost-savings strategy. Nurses are a low-cost alternative to physician care to the extent that nurses are increasingly attaining the skills needed to perform tasks previously provided by physicians.

²Hirsch (2000) finds that virtually the entire part-time wage disadvantage is associated with worker-specific skills that are unmeasured in standard analysis.

³Eligibility for health care coverage also stipulates an hours worked requirement. For instance, the Los Angeles County requires home care employees to work 112 hours per month for two consecutive months to qualify for employee funded health coverage.

⁴Not only are part-timers less likely to receive nonwage benefits, but the value of these benefits are significantly below the value received by full-timers (Lettau, 1999).

⁵The monopolistic structure of municipal governments allows for ease of unionization because the large number of public employees working for a given municipality reduces the per-member cost of organizing (Clemens and Karabegovic, 2005). In addition, the attitudes of public employees and managers towards their work, towards employee involvement in the workplace and towards employee representation provide a strong underpinning for public employee unions (Freeman, 1996).

⁶Information is pooled from these annual files to provide a sample population that is large enough to examine wage and employment patterns of nurses.

⁷Nonmarried children in a family under the age of 18 years are classified as ‘Young Children’ by the CPS.

⁸Other income includes payments from social security, veteran benefits and alimony and child support.

⁹Hourly wage rates are calculated by taking the ratio of individual workers’ weekly earnings and weekly hours worked.

¹⁰Estimated coefficients are converted to percentage differentials using the formula (ε^β  − 1)100.

¹¹The selection variable, or inverse Mills ratio, is derived from separately estimating part-time and full-time status equations that includes variables denoting the number of young children at home and the level of nonlabour market income as instruments.

¹²Although the estimated coefficient on the selection variable is statistically significant, the estimated coefficients on the key variables closely resemble the findings derived from using the OLS technique. Results obtained from using the OLS technique are available from the authors on request.