Underpaid or Overpaid? Wage Analysis for Nurses Using Job and Worker Attributes

The nursing labor market presents an apparent puzzle. Hospitals report chronic shortages, yet standard wage analysis shows that nursing wages have increased over time and greatly exceed those received by other college-educated women. This paper addresses this puzzle. Data from the Current Population Survey (CPS) are matched with detailed job content descriptors from the Occupational Information Network (O*NET). Nursing jobs require higher levels of skills and more difficult working conditions than do jobs for other college educated workers. A standard CPS-only wage regression shows a registered nurse (RN) wage advantage of .22 log points compared to a pooled male/female group of college-educated workers. Control for O*NET job attributes reduces the RN gap to .08, while an arguably preferable nonparametric estimator produces a wage gap estimate close to zero. We conclude that nurses receive compensation close to long-run opportunity costs, narrowing if not resolving the RN wage-shortage puzzle.