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Hospital Consolidation and Monopsony Power in the Labor Market for Nurses

BY | June 12, 2020

The U.S. has faced a persistent nursing shortage since World War II. Monopsony power is often considered a contributing factor to this chronic shortage. In a market with few competitors…

The U.S. has faced a persistent nursing shortage since World War II. Monopsony power is often considered a contributing factor to this chronic shortage. In a market with few competitors and a supply of workers that experiences frictions to changing jobs, hospitals can increase profits by suppressing employment and wages below the competitive level. A wave of hospital consolidation in the U.S. over the last 30 years has only further reduced competition among nurses’ employers and expanded this

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