South-Western College Publishing - Economics  
Patients Care As Nurse Recruitment Resembles a Roller Coaster
Subject Labor supply
Topic Labor Markets
Key Words Students, enrollment, staff, patient care, recruiting, oversupply
News Story

The American Association of Colleges of Nursing reports that, for the fifth consecutive year, fewer students are enrolling in nursing colleges. Enrollment fell 4.6 percent in bachelor's programs and 1.9 percent in master's programs in the Fall of 1999.

The danger is that patient care will suffer. Specialized areas such as home care, acute care, emergency and operating rooms are particularly in need of more staff.

One observer notes that nursing needs to be made more attractive to people. In the 1980s, a federally-funded recruiting campaign convinced many to become nurses. However, it worked too well, because an oversupply developed by the mid-90s.

(Updated May 1, 2000)

Questions
1. Draw a labor demand and supply diagram of the market for nurses. Mark the equilibrium wage and the equilibrium level of employment.
  a) Show the effect of the decrease in nursing school enrollments over the last five years assuming that the wage has not changed. Mark and label the disequilibrium between demand and supply. Is there a surplus or a shortage?
  b) Why will patient care be endangered? Explain with reference to your diagram.
2. One idea is to make nursing more attractive.
  a) Assuming that the recruitment program has the same effect as in the 1980s, illustrate the outcome on your diagram.
  b) Would there be a shortage or a surplus? Illustrate.
  c) Would that be problematic? Why or why not?
3. The news story only refers to one type of solution: altering the supply of labor.
  a) By what two other types of means could the labor market for nurses be brought back into equilibrium?
  b) For each solution, draw a diagram showing the initial disequilibrium in the labor market for nurses, and show how the disequilibrium would be eliminated.
Source Maribel Villalva, "A critical shortage of nursing students," USA Today, February 17, 2000.

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