The quantity and quality of hospital labor

Abstract

The productivity of hospital labor is affected not only by the quantity of labor employed in hospitals but also by the quality of labor employed. In this paper changes in the quantity and quality of the U.S. hospital labor force from 1950 to 1976 are measured and the resulting indices compared with similar characteristics for the U.S. labor force. Quality of hospital workers is measured by changes in education and experience. When these indices are multiplied by a quantity index of man hours worked by hospital workers, a measure of total hospital labor input corrected for changes in quality results. Assuming that the wage rate is proportional to the marginal product of hospital labor, hospital labor of different socio-demographic characteristics is combined by weighting each cell by the average hourly wage rate earned by hospital workers within the cell. The weights are derived from the 1960 1% Public Use Sample of census data where the overall sample was sorted to include only current, income-earning, hospital employees. From this subsample, estimates of yearly income and yearly hours were derived so that an age-sex-education cross-classification of average hourly earnings for hospital employees in 1960 could be produced. There is no reason to believe that hospital workers with general skills are paid other than their marginal product, but workers with health specific skills not easily transferable to other industries might be paid at other than their marginal product. To examine this possibility the economy-wide weights developed by Fuchs from the 1960 1% Census data were substituted for the hospital wage rate weights. Denison has developed a labor input index for the civilian labor force that includes the period from 1950 to 1976. This index, excluding Denison's measure of the effects of changing efficiency due to changes in hours, was used as a comparison for changes in the hospital labor input index. The results of these analyses are presented and discussed and it is shown that changes in the quality of the hospital labor force are not a significant factor in explaining the substantial increase in the hospital labor input index. The growth of education in the overall economy is substantially above the growth of education among hospital workers. Substituting economy-wide wage rates for hospital wage rates as weights has no substantial effect on the importance of quality changes among hospital workers.