A study of nurse labour markets: preferences for pecuniary and non-pecuniary rewards

This study investigated the importance of non-pay aspects within the reward structure for nurses in the UK. A crucial requirement of the current modernisation of the National Health Service (NHS) is the supply of an adequate number of nurses. A key policy question is whether an increase in resources devoted to recruiting and retaining nurses is best spent on wages or upon improving working conditions. There is some evidence of the effect of wages on nursing labour supply, but little on the value placed by nurses on working conditions. Working conditions may become a more important policy instrument in the future with the introduction of the new, more uniform pay structures agreed in ‘Agenda for Change’. The study distinguished the ‘price’ that nurses are willing to pay to improve their working conditions. It identified how nurses trade pay off against other working conditions.

Outcome and Translation

The research results have been disseminated to both the chief economist and statistician of the NHS Pay Review Body and the Head of Workplace Health, Employment Services at NHS Employers. The research provides evidence for the relationship between both pay and conditions for the nursing workforce and provides valuable information for policy-makers and employers. In particular, individual tastes for job characteristics such as the flexibility, predictability and the timing of hours have an important and significant impact on hours of work supplied. While it might be difficult to change individual tastes or preferences over job-specific characteristics, recognizing that these features are important determinants of the labour supply can be utilized to adapt management practices to take these tastes into consideration where possible. This can provide an important additional instrument apart from wages to influence labour supply.

HERU researchers involved in this research project: Diane Skåtun, Bob Elliott and Divine Ikenwilo

External collaborators: A Scott (University of Melbourne)


Skåtun, D. and Elliott, R. (with Geue, C., Eberth, B. and Ikenwilo, D.) (2009) Nurse labour markets: preferences for pecuniary and non-pecuniary rewards. Economic and Social Research Council, Final Report.

Eberth, B., Elliott, R. F. and Skåtun, D. (2016) 'Pay or conditions? The role of workplace characteristics in nurses' labor supply', European Journal of Health Economics, 17(6), 771-785.


Skåtun, D., Elliot, R. and Geue, C. The role that working conditions play in the employment decisions of nurses. "Delivering better health services". Health Services Research Network and National Institute for Health Research Service Delivery and Organisation (NIHR SDO) Programme Annual Conference. Birmingham. June 2009.

Skåtun, D., Eberth, B. and Elliott, R. Pay or conditions? The role of workplace characteristics in nurses’ labour supply. Scottish Economic Society Conference. Perth. April 2010.