Registered Nurse Labor Supply and the Recession

Are We in a Bubble?

Published in: The New England Journal of Medicine, v. 336, no.16, Apr. 2012, p. 1463-1465

Posted on RAND.org on April 01, 2012

by Douglas Staiger, David I. Auerbach, Peter Buerhaus

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Research Question

  1. Is the sharp increase in the number of registered nurses between 2005 and 2010 a result of the recession?

We estimated how the recent recession affected the number of registered nurses in the workforce between 2005 and 2010 and projected how expected decreases in unemployment would affect the size of the RN workforce between 2010 and 2015. Our analysis suggests that employers and workforce policymakers should not be lulled into complacency by the current absence of a nursing shortage. Instead, they should anticipate that the current positive effect of a weak economy on the RN labor supply is likely to evaporate as the economy improves. Shortages will reemerge. Shortages of RNs may reduce access to care and increase costs as employers raise salaries to attract nurses, potentially imperiling the success of health care reform. Therefore, plans to counter the reemergence of a post-recession shortage and to use existing RNs - both incoming and outgoing - as efficiently and effectively as possible should be a priority for policymakers.

Key Finding

  • This substantial expansion in the RN workforce is partly a temporary bubble that is likely to burst between 2010 and 2015 as the unemployment rate falls.

Recommendation

  • Policymakers should focus on ways to counter the reemergence of a post-recession shortage and to use existing RNs—both incoming and outgoing—as efficiently and effectively as possible.

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