The Effect of Unions on the Distribution of Wages of Hospital-Employed Registered Nurses


Joanne Spetz, Michael Ash, Charalampos Konstantinidis, Carolina Herrera

Jan 2011

AIMS AND OBJECTIVES: We estimate the impact of unionisation on the wage structure of hospital-employed registered nurses in the USA. We examine whether unions have an effect on wage differences associated with race, gender, immigration status, education and experience, as well as whether there is less unexplained wage variation among unionised nurses.

BACKGROUND: In the past decade, there has been resurgence in union activity in the health care industry in the USA, particularly in hospitals. Numerous studies have found that unions are associated with higher wages. Unions may also affect the structure of wages paid to workers, by compressing the wage structure and reducing unexplained variation in wages.

DESIGN: Cross-sectional analysis of pooled secondary data from the United States Current Population Survey, 2003-2006.

METHOD: Multivariate regression analysis of factors that predict wages, with models derived from labour economics.

RESULTS: There are no wage differences associated with gender, race or immigration status among unionised nurses, but there are wage penalties for black and immigrant nurses in the non-union sector. For the most part, the pay structures of the union and non-union sectors do not significantly differ. The wage penalty associated with diploma education for non-union nurses disappears among unionised nurses. Unionised nurses receive a lower return to experience, although the difference is not statistically significant. There is no evidence that unexplained variation in wages is lower among unionised nurses.

CONCLUSIONS: While in theory unions may rationalise wage-setting and reduce wage dispersion, we found no evidence to support this hypothesis.

RELEVANCE TO CLINICAL PRACTICE: The primary effect of hospital unions is to raise wages. Unionisation does not appear to have other important wage effects among hospital-employed nurses.