Does Public or Not-for-Profit Status Affect the Earnings of Hospital Workers?

Abstract

This paper examines the earnings differentials among hospital workers in the public, private nonprofit, and private for-profit sectors. Utilizing data from the 1995 through 2007 Current Population Surveys, unadjusted earnings are highest in the private nonprofit sector and lowest in private for-profit firms. Once measurable characteristics are accounted for, health practitioners in for-profit and nonprofit hospitals earn similar wages while public sector workers earn small but significant wage penalties. Nonprofit hospitals tend to attract workers with higher levels of skill as measured by schooling and potential experience. This could be explained in part by worker sorting and lower cost containment incentives in nonprofit hospitals. Wage change analysis using pooled 2-year panels constructed from the CPS indicate no significant differences in earnings between the three sectors of employment. Whatever the role of the sector of employment on the overall earnings of hospital workers, there is sufficient worker mobility within the industry to largely eliminate systematic wage differences across type of hospital.

Nonprofit Pay in a Competitive Market: Wage Penalty or Premium?

“…Using the Current Population Survey (CPS) Outgoing Rotation Groups, Ruhm and Borkoski (2003) find that nursing and personal care workers who switch sectors (while presumably maintaining their same altruism and quality levels) see approximately the same pay effects as their cross-sectional analyses of the broader CPS predict. Using more recent years of the same data source, Schumacher (2009) gets approximately the same result, suggesting that selection effects are minor in sectoral differences in pay for nurses. Byrne (2014) argues that the large proportion of nonprofit hospitals with religious affiliations enables him to account for self-selection, as those will attract more religious employees with altruistic motives.…”

“…This increases nonprofit managers' discretion, which they can use to increase compensation for themselves and others. Nonprofits' tax exemptions may also lower their costs enough to allow them to afford higher quality employees (Schumacher, 2009). If education and experience do not fully capture these higher skills, empirical studies might mistakenly find a wage premium (Byrne, 2014).…”

“…Although Ruhm and Borkoski (2003) and Schumacher (2009) have examined nursing pay differentials across different hospital ownership, we provide a more complete and current picture. First, data from the ACS provide a much larger sample size than the Current Population Survey (especially the Outgoing Rotation Groups); our sample includes nearly 90,000 RNs, compared with about 3,000 RNs in previous studies using the CPS.…”

How did we get here? The career paths of higher education fundraisers

“…Bowman (2010) argues that another form of P-J fit-needs-supply-is a major driving force for lacking recruitment, suggesting that many students do not see fundraising as a viable career path, largely borne from a belief that working at a nonprofit necessarily means unsustainably low salaries. Evidence is mixed regarding wage differentials between nonprofit and for-profit professionals (Bishow & Monaco, 2016;Borkoski & Ruhm, 2016;Handy & Katz, 1998;Handy, Mook, Ginieniewicz, & Quarter, 2007;Leete, 2002;Schumacher, 2009), but fundraisers are often among the highest-paid nonprofit employees and among the highest-paid administrative staff at universities (Lindahl & Conley, 2002;Mesch & Rooney, 2008). In 2016, the average salary of all fundraisers (not just those in higher education) was $70,256 (Association of Fundraising Professionals, 2017).…”

Wage determinants among medical doctors and nurses in Spain

“…If we bear in mind that in Spain tuition fees are very similar in both degrees (per academic year), the individual's decision at age eighteen, in the context of the human capital theory (Becker 1964), will be affected by the net benefits of the investment in three extra years of university education. Despite the economic returns to higher education in these fields of study are well established (Wilson 1987;Elliott 2003;Galarneau 2004;Schumacher 2009), the economic advantages of graduates in Medicine relative to graduates in Nursing have not been explored empirically in Spain yet. Therefore, the aim of this paper is to study wage differentials among health professionals-a wage premium for doctors describes the percentage difference between that occupation's wage rate and the rate for nurses.…”