Retaining Australian Nurses: An Analysis of Nurses’ Wages and Exit Rates

Abstract

This study examines the factors influencing Australian nurses’ decisions to leave the nurse profession, describes the pathways that nurses take after leaving the profession, and estimates the average wage change associated with a nurse changing professions. Using longitudinal data from the Australian Household, Income, and Labour Dynamics in Australia Survey and panel data estimation methods, we find that a nurse’s pre-exit hourly wage is significantly associated with a nurse’s exit decision, whereby higher wages are associated with greater risk of exit. Other significant risk factors are age, childbirth, residential location change and tertiary qualifications. We also find that most nurses stay within the health care sector when quitting their job. These job transitions are characterised by significant increases in hourly wages and occupational prestige, suggesting that nurses who change jobs do so for better job opportunities. This holds true in particular for nurses with tertiary education. We conclude that nurse exit decisions are not associated with loss in human capital for the healthcare sector overall, but if the policy objective is to address nurse shortages by retention rather than new admissions, then higher wages would have to be paid.