Hospital Expenditure as a Major Driver of Nurse Labour Force Participation: Evidence from a 10-Year Period in Canada

This paper examines trends in the nursing labour market in Canada over a period of dramatic fluctuations in hospital expenditures. We add to previous analysis that covered the period 1991-1996 and use Census data from 2001 to examine the relationship between hospital expenditure and nurse labour force participation. We find that shifts in labour force participation over the period 1991-2001 had a significant impact on the nursing supply in Canada. Individuals who were trained in nursing but were working outside the profession in 1996 because of budgetary reductions and layoffs in hospitals had largely been reabsorbed back into nursing jobs by 2001. Our analysis provides further empirical evidence that the labour force participation among individuals trained in nursing is driven to a large extent by demand-side factors.