Direct and indirect effects of unionization on the wage levels of nurses: A case study of New Jersey hospitals

This study examines the determination of wage rates for nurses in hospital employment. Of particular concern is the effect of the recent increase in unionization by nurses on their wages, both directly and indirectly via threats from competing hospitals’ unionization. To improve on earlier work, the data are disaggregated and gathered from only one state to standardize for the legal, licensing, and reimbursement systems. We also look at the difference between highly skilled professional nurses, RN’s, and more general and less professional nurses, LPN’s. The results show that working conditions and competition in the market influence the wage rate as one would expect. The unionization of nurses, however, affects the wage levels differently for the two groups. We would like to thank Professors Robert Higgs and Alan Childs of Lafayette College, Professor David Fairris of Williams College, Professor James C. Luzier of Muhlenberg College, and an anonymous referee for their helpful comments and suggestions.