The influence of nurse wage differentials on nursing home staffing and resident care decisions.

This study examines the extent to which nursing homes adjust staffing and care practices relative to local market conditions. Weighted two-stage least squares regression results suggest that facilities employ more nonprofessional nursing staff in markets in which professional nurse wages are higher. RN staffing levels are higher in markets with a higher percentage of self-pay nursing home residents and a lower percentage of for-profit nursing homes. Controlling for resident characteristics, the use of labor-saving practices is higher in markets with higher average nursing home wages, suggesting that there are economic incentives to hire fewer nursing personnel.