Disequilibrium and Human Capital in Pharmacy Labor Markets: Evidence From Four States

To estimate the association between pharmacists' stocks of human capital (work experience and education), practice setting, demographics, and wage rates in the overall labor market and to estimate the association between these same variables and wage rates within six distinct pharmacy employment sectors. Wage estimation is used as a proxy measure of demand for pharmacists' services. Descriptive survey analysis. Illinois, Minnesota, Ohio, and Wisconsin. Licensed pharmacists working 30 or more hours per week. Analysis of data collected with cross-sectional mail surveys conducted in four states. Hourly wage rates for all pharmacists working 30 or more hours per week and hourly wage rates for pharmacists employed in large chain, independent, mass-merchandiser, hospital, health maintenance organization (HMO), and other settings. A total of 2,235 responses were received, for an adjusted response rate of 53.1%. Application of exclusion criteria left 1,450 responses from full-time pharmacists to analyze. Results from estimations of wages in the pooled sample and for pharmacists in the hospital setting suggest that advanced training and years of experience are associated positively with higher hourly wages. Years of experience were also associated positively with higher wages in independent and other settings, while neither advanced education nor experience was related to wages in large chain, mass-merchandiser, or HMO settings. Overall, the market for full-time pharmacists' labor is competitive, and employers pay wage premiums to those with larger stocks of human capital, especially advanced education and more years of pharmacy practice experience. The evidence supports the hypothesis that demand is exceeding supply in select employment sectors.