Well-Paid Nurses are Good Nurses: An Analysis of Nursing Supply Based on Determinants of Work Motivation

Some recent health economics papers suggest that increasing wage in the nursing labor market with the aim of reducing shortage may yield a negative effect on the average productivity and/or the average motivation of applicants attracted. Some feminist economics papers criticize this inefficiency wage result on the grounds that nurses' motivation is modeled in an overly simplistic way. The current paper aims to address this criticism by considering explicitly determinants of work motivation. Relying on introductory concepts from organizational psychology and management literatures, the inefficiency wage result is shown to disappear. A pay raise turns out to have no negative effect both on the average productivity and the average motivation of applicants attracted.