Serving the Medicaid and Medicare Populations: Nursing Labor Market Dynamics

Abstract

In this paper we examine the effects of changes in Medicaid and Medicare coverage on the employment of registered nurses, licensed practical nurses, and certified nursing assistants. With estimates using time series data, we find that Medicaid coverage has a significant positive effect on the employment of registered nurses in the short run. A 10 percent increase in Medicaid coverage is associated with a 2.74 percent increase in registered nurse employment. Results also show that a model of monopsony power, previously applied to hospitals, is relevant to nursing homes.