The Effect of Prior Health-related Employment on the Wages of Registered Nurses

Background and Objective: Among all registered nurses (RNs), the proportion of RNs with prior employment in health-related positions before completing their initial RN education was 67% in 2008, having increased steadily from 29% in 1992.  Previous research found that prior health-related employment is positively associated with the workforce supply.  This study’s objective is to test the hypothesis that prior health-related employment is associated with differences in starting wages as well as the wage growth for additional years of experience as an RN.

Methods: We conducted a cross-sectional analysis, using the 2008 National Sample Survey of Registered Nurses (NSSRN) linked with county-level variables from the Area Resource File. To account for the self-selection of working or not working as RN, we estimated a Heckman model where the primary outcome variable was the logarithm of the RN hourly wage.  The key covariates included interaction terms between years of experience, experience squared, and seven categories of prior health-related employment: Manager, licensed nursing (LPN/LVN), allied health, clerk, nursing aide with RN school graduation at <30 years old, nursing aide with RN school graduation at ≥30 years, and all other health-related positions.  Additional covariates were whether the RN works more than 40 hours per week, gender, marital status, race, highest nursing degree, working facility, region and county-level variables (unemployment rate; uninsured rate; and primary care practitioners/the medical, surgical and other specialists per 1,000-population).  We estimated the marginal effect of experience for each type of prior health-related employment, conducting separate analyses for three populations: all RNs and two subpopulations defined by their initial nursing degree, either Bachelor or Associate degree (un-weighted/weighted N = 10,565~31,386/967,075~2,903,220).

Results:  The hypothesized association between prior health-related employment and wage differences was most supported among RNs with a Bachelor degree as an initial nursing degree: among seven categories of prior health-related employment, three categories (manager, LPN/LVN, and nursing aide with RN school graduation at <30 years) were found to have a statistically higher start wage (p=.02~.06) than those without prior health-related employment (reference group).  For instance, the difference in starting annual salary ranged from $3,000 (prior employment as nursing aide with RN school graduation at <30 years) to $8,700 (prior employment as manager). On the other hand, the experience-based wage growth was lower for those with three categories of prior employment (allied health, LPN/LVN, and nursing aide with RN school graduation at <30 years; p<.05).  For instance, when experience increased from 5 years to 6 years, the hourly wage increase ranged from $0.16 to $0.43 for these three categories, compared to $0.61 for the reference group.  Consequently, RNs with prior LPN/LNV (or nursing aide with RN school graduation at <30 years) employment earned a higher wage until they had accrued approximately 10 (or 11) years of experience.  For the other two populations, we found similar but statistically weaker findings.

Conclusions:  Prior employment in health-related positions appears to increase the starting salary but reduce experience-based wage growth compared to RNs who do not have prior health-related employment.