MONOPSONY POWER AND RELATIVE WAGES IN THE LABOR-MARKET FOR NURSES

This paper examines the thesis that monopsony power is an important de terminant of wages in nursing labor markets. Using data from the 1985- 93 Current Population Surveys, measures of relative nurse/non-nurse wa ge rates for 252 labor markets are constructed. Contrary to prediction s from the monopsony model, no positive relationship exists between re lative nursing wages and hospital density or market size. Nor is suppo rt found for the presence of monopsony power based on evidence on unio n wage premiums, slopes of experience profiles, or the mix of RN to to tal hospital employment.