Order Code RL30974
CRS Report for Congress
Received through the CRS Web
A Shortage of Registered Nurses: Is It On the
Horizon or Already Here?
May 18, 2001
Linda Levine
Specialist in Labor Economics
Domestic Social Policy Division
Congressional Research Service ˜ The Library of Congress
A Shortage of Registered Nurses:
Is It On the Horizon or Already Here?
Summary
Shortages of workers in various occupations and industries have been widely
reported starting in the late 1990s. It is not unusual for firms to have difficulty hiring
and retaining employees after the economy has been expanding for many years. What
makes the current situation different is that the unemployment rate has been lower
than it was during many prior cyclical peaks. In addition, the labor force is aging as
most baby-boomers (i.e., the very large group born between 1946 and 1964) are in
the last half of their working lives and as fewer workers are available from the smaller
generation that followed them. For certain industries and occupations, there are
additional elements — also unrelated to the business cycle — that make current and
future labor market conditions distinctive. For example, the increasing longevity of
the population combined with a growing share of elderly persons have been putting
added pressure on the health care delivery system. Moreover, although women
continue to account for the majority of personnel in many health care occupations,
their career opportunities have widened over the years. Thus, health care providers
who previously might have thought their supply of labor was fairly well assured must
now compete with other fields for the interest of students.
The largest, traditionally female-dominated health care occupation is registered
nurses (RNs). It has been asserted that too few RNs currently are available to meet
employer demand or that there will be a shortage in the not-too-distant future.
Analysts use a combination of indicators (e.g., the occupational unemployment rate
as well as the pace of wage increases and of job growth) to determine the current
state of the labor market because no direct measure exists of supply-demand
imbalance. It cannot be stated conclusively, based upon the available labor market
indicators, that there is an across-the-board shortage of RNs at the present time.
Nonetheless, in certain geographic areas or for certain types of nurses (e.g., those
who staff hospital emergency rooms) there could be a shortfall of RNs, but this
suggests a maldistribution of labor rather than a shortage per se.
There is more convincing evidence pointing toward supply in the RN labor
market failing to meet demand around 2010, unless ameliorative actions are
undertaken. The nursing workforce has been aging to an even greater extent than the
labor force as a whole. This situation has arisen, in part, because the smaller
generation of young women who followed the baby-boomers has been less inclined
to enter nursing given the more attractive career options that have opened up to them
in recent decades. The potential RN shortage thus differs from its predecessors which
were not marked by a need to replace substantial numbers of retiring nurses, and as
a result, it may prove more difficult to remedy. Employers will likely try to
simultaneously curtail their demand for RNs and attract more women and men to the
occupation by reassigning some tasks now performed by RNs to paraprofessional
nursing personnel, utilizing productivity-enhancing technology, increasing RNs’
wages and improving working conditions. Other efforts might include upgrading the
image of nurses, lowering education costs and importing more nurses from abroad.
Contents
Who Are We Talking About? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
The Demand for Registered Nurses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Where Will RN Job Growth Be? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Future Job Openings for RNs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Rapid and Large Job Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Substantial Retiree Replacement Needs . . . . . . . . . . . . . . . . . . . . . . . 6
The Supply of Registered Nurses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
The Trend in Graduates from Nursing Degree Programs . . . . . . . . . . . . . . 7
The Total Supply of RNs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
A Shortfall of Registered Nurses? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Projected Labor Market Conditions for RNs . . . . . . . . . . . . . . . . . . . . . . 12
Current Labor Market Conditions for RNs . . . . . . . . . . . . . . . . . . . . . . . . 15
The Unemployment Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Wage Increases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Employment Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Concluding Remarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
List of Tables
Table 1. Employment of Registered Nurses, 1998 (actual) and 2008 (projected), by
Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Table 2. Graduates from Nursing Degree Programs, 1976-1998 . . . . . . . . . . . . 8
Table 3. Projected Number of Graduates from Basic Nursing Education Programs,
1998-2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Table 4. Projected Supply of Registered Nurses, 1998-2020 . . . . . . . . . . . . . . 11
Table 5. The First Comparison of Projected Supply and Demand in the RN Labor
Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Table 6. The Second Comparison of Projected Supply and Demand in the RN Labor
Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Table 7. Employment, the Unemployment Rate and Median Weekly Earnings of
Registered Nurses and of Professionals Overall, 1989-2000 . . . . . . . . . . . 16
A Shortage of Registered Nurses:
Is It On the Horizon or Already Here?
Shortages of workers in various occupations (e.g., computer systems analysts)
and in various industries (e.g., construction) have been widely reported in recent
years. It is not unusual for employers to have difficulty hiring and retaining employees
after the economy has been expanding for quite some time. What makes the current
situation different, however, is that the unemployment rate during the latest economic
expansion has been lower than it was during many of the prior cyclical peaks.1
In addition, the labor force is aging as most baby-boomers (i.e., the large group
born between 1946 and 1964) are in the last half of their working lives and as fewer
workers are available from the smaller generation that followed them. Higher rates
of productivity likely will in some but not all instances be able to compensate for the
smaller replacement pool of workers and thereby allow employers to continue to fulfill
consumers’ demand for goods and services.
For certain industries and occupations, there are additional elements — also
unrelated to the business cycle — that make current and future labor market
conditions unique. The increasing longevity of the population combined with a
growing share of elderly persons have been putting added pressure on the nation’s
health care delivery system.2 And, the implications of inadequate staffing among
health care workers differ from those of other workers in many industries. For
example, a dearth of blue-collar assemblers and fabricators might mean that
consumers have fewer cars to choose from while a scarcity of health care personnel
might jeopardize the quality of patients’ care. Moreover, although women continue
to account for the majority of staff in many health care jobs,3 their career
opportunities have widened over the years. Thus, health care providers who
previously might have thought their supply of labor was fairly well assured must now
compete with other fields for the interest of students.
1In September and October 2000, the unemployment rate fell to its lowest point in the latest
economic expansion. Although it has since risen from 3.9% (e.g., in April 2001 it was 4.5%),
the unemployment rates during many of the prior nine post-war peaks in the business cycle
remain lower: 5.4% (July 1990), 7.2% (July 1981), 6.3% (January 1980), 4.8% (November
1973), 3.5% (December 1969), 5.2% (April 1960), 4.1% (August 1957), 2.6% (July 1953),
and 3.8% (November 1948).
2Wunderlich, Gooloo, with Frank A. Sloan and Carolyne K. Davis (eds.). Nursing Staff in
Hospitals and Nursing Homes. Washington, D.C., National Academy Press, 1996.
3In 2000, women accounted for 93.6% of licensed practical nurses; 92.8% of registered
nurses; 89.9% of nursing aides, orderlies and attendants; 75.0% of clinical lab technologists
and technicians; 74.7% of therapists; and 69.2% of radiologic technicians. U.S. Bureau of
Labor Statistics. Employment and Earnings, January 2001.
CRS-2
The largest, traditionally female-dominated health care occupation is registered
nurses (RNs). It has been asserted that there are too few RNs available today to meet
employers’ needs, that is, there is a shortage of nurses at the present time. It also has
been estimated that there could well be a shortage of RNs in the not-too-distant
future. This report will analyze the labor market conditions facing RNs and their
employers.
Who Are We Talking About?
The exact nature of RNs’ daily duties usually depends on the setting in which
they work.4
! In hospitals, staff RNs typically “provide bedside nursing care and carry out
medical regimens.” They often supervise licensed practical nurses (LPNs) and
aides.
! Nurses who work in physicians’ offices usually prepare patients for exams and
help doctors perform them, give injections, apply dressings and sometimes
keep the offices’ records.
! Nursing home RNs largely perform administrative and supervisory functions.
They also may evaluate the health of residents and work up treatment plans as
well as “perform difficult procedures.”
! Home health nurses “provide periodic services, prescribed by a physician” in
the homes of patients. They often work independently but also supervise home
health aides.
! Government and private agencies, schools, senior citizen centers and other
community-based organizations employ public health nurses. They provide
instruction about such things as disease prevention and nutrition as well as
arrange for various health screenings.
! Occupational health or industrial nurses work at firms that engage them to
provide limited medical care. In addition to providing emergency assistance
and writing up accident reports, these RNs offer health counseling and help
with injections.
! Head nurses or nurse supervisors perform such administrative and supervisory
functions as creating work schedules for and assigning duties to nurses and
aides, “provid[ing] or arrang[ing] for training, and visit[ing] patients to observe
nurses.”
! Nurse practitioners provide primary health care (i.e., prescribe medication and
otherwise diagnose and treat common acute illnesses and injuries). Other
advanced practice nurses include clinical nurse specialists, nurse anesthetists
and nurse midwives. They all must fulfill higher educational and clinical
experience requirements than those established for the aforementioned groups.
4All information in this section is drawn from U.S. Bureau of Labor Statistics. Occupational
Outlook Handbook 2000-01 Edition unless otherwise noted. Available at
[http://stats.bls.gov:80/oco/ocos083.htm]. (Hereafter cited as BLS, Occupational Outlook
Handbook.)
CRS-3
A basic nursing education in all states consists of graduation from a nursing
program and passing a national licensing exam. Hospitals offer diploma programs,
which take 2-3 years to complete. Although 63% of RNs in 1980 graduated from
diploma programs, the share who received their basic nursing education from this
source was more than halved, to 30%, by 2000.5 Community colleges offer associate
degrees in nursing (ADNs), which take about 2 years to complete. In 2000, they
accounted for 40% of registered nurses — about twice their share of 19% in 1980.
Colleges and universities offer bachelors degrees in nursing (BSNs), which take 4 or
5 years to complete. The share of RNs who initially earned BSNs also rose
considerably, from 17% in 1980 to 29% in 2000. In addition to classroom
instruction, nursing students must have supervised clinical experience in hospitals,
nursing homes, home health agencies or other health care facilities.
The Demand for Registered Nurses
No direct measure of employer demand for workers exists. Instead, a commonly
used proxy is employment. It is an imperfect substitute, however, because the number
of employed workers can understate demand if supply limitations prevent firms from
utilizing as many workers as they would like.
Where Will RN Job Growth Be?
As shown in Table 1, hospitals are projected to continue to employ the majority
of RNs (53% of the total in 2008). Employment of hospital staff nurses is expected
to grow more slowly compared to other RNs because activities once performed on
an inpatient basis increasingly are being performed on an outpatient basis at hospitals
or in other settings. For example, the number of new nursing jobs is projected to
expand by 44.5% in physicians’ offices compared to 7.9% in hospitals. Although the
number of patients who stay overnight in hospitals could well remain unchanged in
future years, “the intensity of nursing care is likely to increase, requiring more nurses
per patient.”6
The ranks of RNs already employed in large numbers at other workplaces are
expected to expand substantially. Specifically, the number of new jobs for nurses at
home health agencies is projected to increase by 82.2%, and the number for nurses
at nursing/personal care facilities is projected to increase by 41.9%. The preference
of people to be cared for in their homes and new technologies that permit complex
treatments to be performed at home, as well as the “growing number of older persons
5Health Resources and Services Administration. Division of Nursing. Bureau of Health
Professions. National Sample Survey of Registered Nurses — March 2000. Preliminary
Findings, February 2001. Available at [ftp://158.72.84.9/ftp/bhpr/nursing/sampsurvpre.pdf].
(Hereafter cited as HRSA, National Sample Survey of Registered Nurses.)
6BLS, Occupational Outlook Handbook.
CRS-4
with functional disabilities, ... many of whom will require long-term care,” explain
these disparate projected trends in RN employment by industry.7
Table 1. Employment of Registered Nurses, 1998 (actual) and
2008 (projected), by Industry
1998 Employment
2008 Employment
Change, 1998-2008
Industry
%
%
Number
Distri-
Number
Distri-
Number
Percent
bution
bution
Total, all
2,078,810
100
2,529,674
100
450,864
21.7
industries
Hospitals
1,238,720
60
1,336,476
53
97,756
7.9
Physicians’
173,167
8
250,246
10
77,079
44.5
offices
Nursing &
personal care
149,355
7
211,985
8
62,629
41.9
facilities
Home health
129,304
6
235,573
9
106,269
82.2
care services
Education,
public &
65,103
3
82,494
3
17,391
26.7
private
Personnel
supply
52,613
3
71,303
3
18,690
35.5
services
Federal
46,060
2
45,228
2
-833
-1.8
government
Local gov’t,
excl. ed. &
43,570
2
48,800
2
5,230
12.0
hospitals
State gov’t,
excl. ed. &
38,035
2
41,226
2
3,191
8.4
hospitals
Health &
allied
32,336
2
53,739
2
21,403
66.2
services, neca
7Ibid.
CRS-5
1998 Employment
2008 Employment
Change, 1998-2008
Industry
%
%
Number
Distri-
Number
Distri-
Number
Percent
bution
bution
Self-
employed
17,702
1
23,637
1
5,935
33.5
workers,
primary job
Residential
16,273
1
24,032
1
7,760
47.7
care
Individual &
misc. social
11,130
1
14,981
1
3,851
34.6
services
Management
& public
9,829
0
14,314
1
4,484
45.6
relations
Offices of
other health
8,648
0
17,294
1
8,646
100.0
practitioners
Medical
service &
7,507
0
13,004
1
5,497
73.2
health
insurance
Source: U.S. Bureau of Labor Statistics. Occupation-Industry Matrix derived from the Occupational
Employment Survey which queries employers.
Note: Numbers may not add to totals and percentages may not add to 100 because only industries
that account for at least 1% of total RN employment in 1998 or 2008 are shown.
anec = not elsewhere classified.
Future Job Openings for RNs
The demand for labor can increase for two reasons. When consumers want
more of an industry’s goods or services, firms may add employees to their payrolls
(i.e., the job growth discussed above). Hiring also may increase if more of a firm’s
employees leave to take positions at other employers, or exit the labor force to return
to school or due to retirement, disability or death (i.e., replacement needs).
Rapid and Large Job Growth. The employment growth rate of RNs
through 2008 is projected to be above the all-occupations’ average (21.7% and
14.4%, respectively).8 Nursing also is among the occupations expected to add the
8Braddock, Douglas. Occupational Employment Projections to 2008. Monthly Labor
(continued...)
CRS-6
most new jobs over the 10-year period (450,864 or 2.2% of total job growth).
Technological advances that allow more medical problems to be treated and an
increasing number of older people who, compared to younger people, are more likely
to need medical care underlie the considerable increase in demand for RNs anticipated
in the next several years.
Substantial Retiree Replacement Needs. The need to replace workers
across all industries will accelerate as more members of the baby-boom generation
retire. Health care providers generally, and hospitals particularly as the largest
employer of RNs, could be among the industries most affected by this demographic
phenomenon because an above-average proportion of nurses are aged 45 and older
(39% of RNs versus 34% of all employees).9 The U.S. Bureau of Labor Statistics
(BLS) estimates that employers will need to replace 331,000 RNs who are forecast
to retire between 1998 and 2008, with the majority of those retirements likely to
occur toward the end of the period when baby-boomers will be between 45 and 62
years old. Of the 794,000 total job openings projected for RNs through 2008, almost
42% could arise from the need to replace retirees.10
The Supply of Registered Nurses
It usually is thought to be more difficult to estimate occupational labor supply
than demand. The number of entrants to the RN workforce can be discerned, in part,
by looking at data on graduates from programs that offer nursing degrees. The supply
of new workers to nursing can be estimated more easily than the supply to many other
occupations where college major is less determinative of the field into which the
student will go or where no formal education or training beyond high school typically
is required. By focusing on graduations alone, however, the supply of new RNs could
well be understated because the availability of nurses from abroad — who can enter
the country permanently or as temporary workers11 — would be omitted. In order
to develop the best possible estimate of the prospective total supply of labor to RN
jobs, “leavers” (i.e., RNs who take jobs in other occupations or who exit the labor
force for such reasons as retirement or disability) also must be taken into account.
8(...continued)
Review, November 1999. (Hereafter cited as Braddock, Occupational Employment
Projections.)
9Dohm, Arlene. Gauging the Labor Force Effects of Retiring Baby-Boomers. Monthly Labor
Review, July 2000.
10Ibid., and Braddock, Occupational Employment Projections.
11Foreign nurse graduates can enter the country on a permanent basis either as relatives of
U.S. citizens or legal permanent residents, or as employment-based immigrants. They also
can enter as temporary workers by obtaining an H-1C visa (CRS Report RS20164,
Immigration: Temporary Admission of Nurses for Health Shortage Areas (P.L. 106-95),
by Joyce Vialet) or an H-1B visa if they have a bachelor’s degree, or if they are from Mexico
or Canada, by applying for Trade NAFTA (North American Free Trade Agreement) status.
CRS-7
The Trend in Graduates from Nursing Degree Programs
As shown in Table 2, the number of graduates from programs that prepare
students for RN licensure (i.e., diploma, associate and baccalaureate) has waxed and
waned in recent decades. The 10% increase in graduates between the 1975-1976 and
1997-1998 academic years was marked by 10 years of absolute decreases, with 3 of
those years in the most recent period for which data are available.
CRS-8
Table 2. Graduates from Nursing Degree Programs, 1976-1998
Academic year
Number
Annual percent change
1975-1976
77,065
—
1976-1977
77,755
0.90
1977-1978
77,874
0.15
1978-1979
77,132
-0.95
1979-1980
75,523
-2.09
1980-1981
73,985
-2.04
1981-1982
74,052
0.09
1982-1983
77,408
4.53
1983-1984
80,312
3.75
1984-1985
82,075
2.20
1985-1986
77,027
-6.15
1986-1987
70,561
-8.39
1987-1988
64,839
-8.11
1988-1989
61,660
-4.90
1989-1990
66,088
7.18
1990-1991
72,230
9.29
1991-1992
80,839
11.92
1992-1993
88,149
9.04
1993-1994
94,870
7.62
1994-1995
97,052
2.30
1995-1996
94,757
-2.36
1996-1997
91,421
-3.52
1997-1998
84,847
-7.19
Source: Data provided by the National League for Nursing through 1995-1996 may be found in
Heath Resources and Services Administration, Bureau of Health Professions, National Center for
Health Workforce Information and Analysis. United States Health Workforce Personnel Factbook.
Available at [http://www.bhpr.hrsa.gov/healthworkforce/factbook.htm]. Data for 1996-1997 and
1997-1998 are unofficial, unpublished data from the National League for Nursing.
CRS-9
According to a projection made by the Division of Nursing of the Health
Resources and Services Administration, U.S. Department of Health and Human
Services, graduations from basic nursing education programs will increase to a
somewhat greater degree between 1998 and 2020 (13%) than between 1976 and 1998
(10%). (See Tables 2 and 3.) The projection took into account such factors as
historical graduation data through the early 1990s, the proportion of the female high
school graduates that have been enrolling in schools of higher education and the
availability and attractiveness of nursing as a career (i.e., measures of job openings,
salaries and health expenditures).
Table 3. Projected Number of Graduates from Basic Nursing
Education Programs, 1998-2020
Academic year
Number
Annual percent change
1997-1998
78,132
—
1998-1999
77,702
-0.55
1999-2000
79,664
2.53
2000-2001
80,622
1.20
2001-2002
81,009
0.48
2002-2003
80,067
-1.16
2003-2004
80,950
1.10
2004-2005
84,160
3.97
2005-2006
85,005
1.00
2006-2007
85,051
0.05
2007-2008
82,589
-2.89
2008-2009
83,951
1.65
2009-2010
88,304
5.19
2010-2011
89,372
1.21
2011-2012
89,183
-0.21
2012-2013
83,957
-5.86
2013-2014
85,510
1.85
2014-2015
90,042
5.30
2015-2016
90,395
0.39
CRS-10
Academic year
Number
Annual percent change
2016-2017
89,126
-1.40
2017-2018
79,413
-10.90
2018-2019
81,133
2.17
2019-2020
88,065
8.54
Source: National Advisory Council on Nurse Education and Practice. Report to the Secretary of
the Department of Health and Human Services on the Basic Registered Nurse Workforce. Health
Resources and Services Administration, Bureau of Health Professions, Division of Nursing, 1996.
The Total Supply of RNs
The Division of Nursing built on its projected supply of graduates from basic
nursing education programs to develop a projection of the total supply of RNs. It was
produced by looking at such things as the historical trend in the proportion of the RN
population that is employed in nursing, economic and social forces evident in the early
1990s that were expected to influence RN employment (e.g., changes in women’s
employment rate and in nurses’ salaries) and information on foreign graduate first-
time licensees. In addition, estimates of leavers were derived by taking into
consideration such things as trends in deaths among white women and in retirement
across all types of workers. The Division of Nursing expects to release new supply-
demand projections for RNs, based on more recent data, in summer 2001.
Although the total supply of RNs is projected to almost steadily increase through
2020, it is expected to do so at a diminishing rate. (See Table 4.) The falloff in the
growth rate could be particularly steep between 2005 and 2008, when an especially
large number of baby-boom RNs (i.e., those born between 1948 and 1959) will start
reaching 55 years of age — an age “at which RNs have historically begun to reduce
their labor participation.”12 Another sharp reduction in the growth rate is anticipated
between 2012 and 2013, when this large subset of baby boomers will reach what
typically are the waning years of a person’s working life.
12Minnick, Ann F. Retirement, the Nursing Workforce, and the Year 2005. Nursing Outlook,
September/October 2000. p. 211.
CRS-11
Table 4. Projected Supply of Registered Nurses, 1998-2020
Year (as of December 31)
Number
Annual percent change
1998
2,221,000
—
1999
2,256,000
1.58
2000
2,290,000
1.51
2001
2,321,000
1.35
2002
2,354,000
1.42
2003
2,386,000
1.36
2004
2,417,000
1.30
2005
2,448,000
1.28
2006
2,473,000
1.02
2007
2,496,000
0.93
2008
2,514,000
0.72
2009
2,531,000
0.68
2010
2,551,000
0.79
2011
2,573,000
0.86
2012
2,591,000
0.70
2013
2,600,000
0.35
2014
2,609,000
0.35
2015
2,620,000
0.42
2016
2,628,000
0.31
2017
2,634,000
0.23
2018
2,629,000
-0.19
2019
2,627,000
-0.08
2020
2,631,000
0.15
Source: National Advisory Council on Nurse Education and Practice. Report to the Secretary of
the Department of Health and Human Services on the Basic Registered Nurse Workforce. Health
Resources and Services Administration, Bureau of Health Professions, Division of Nursing, 1996.
CRS-12
A Shortfall of Registered Nurses?
As discussed below, the latest estimates from which supply and demand
conditions in the labor market for RNs may be observed point to a looming national
shortage unless pre-emptive actions are taken. In contrast, reports that nurses
currently are in short supply generally are anecdotal, or they relate to a specific kind
of nurse (e.g., experienced nurses with specific skills as opposed to newly licensed
RNs) or specific geographic areas which suggest a maldistribution of labor rather than
a shortage per se.13
Projected Labor Market Conditions for RNs
A sense of future conditions in the RN labor market can be gleaned from a
comparison of the BLS demand projections and the Division of Nursing’s supply
projections. As shown in Table 5, the estimated supply of RNs in 1998 exceeded the
number actually employed in that year by 142,190. Absent intervening actions, it is
not until some time late in the current decade that a shortage might occur: the supply
of RNs in 2008 is projected to fall just shy of demand, by 15,674 persons. The gap
could actually be slightly wider if the BLS and the Division of Nursing used the same
definition for RNs. The BLS categorizes RNs who principally are teachers or
managers in those non-nursing occupations; the Division of Nursing categorizes all
persons who have a nursing license as RNs. Nonetheless, the difference is so small
that some might regard it as indicating a balance of supply and demand.
Table 5. The First Comparison of Projected Supply and Demand
in the RN Labor Market
Year
Supply of RNsa
Demand for RNsb
1998
2,221,000
2,078,810
2008
2,514,000
2,529,674
Source: Supply data from Table 4 and demand data from Table 1.
aThe supply figures for 1998 and 2008 are projections.
bThe demand figure for 1998 is actual employment of RNs. Employment in 2008 is a projection.
A very similar situation is revealed by comparing the Division of Nursing’s
supply and demand projections for RNs, despite the aforementioned difference in RN
definition, the fact that the Division’s demand estimate uses a different methodology
than that employed by BLS14 and the fact that it is based on statistics from the early
13See, for example, The Center for Health Workforce Studies, School of Public Health,
University at Albany. Meeting Future Nursing Needs of New Yorkers: The Role of the State
University of New York. Rensselaer, NY, October 2000.
14For example, the Division of Nursing’s demand model develops forecasts for each state that
(continued...)
CRS-13
1990s while BLS’ employment projection is based on data from later in the decade.
As shown in Table 6, an extremely slight shortfall of RNs is projected to occur in
2009. The imbalance is expected to worsen through 2020, assuming ameliorative
actions are not taken, when the demand for RNs could be 13% greater than the
supply.
Much the same results emerge from an analysis that developed an alternative
projection of the RN labor supply and compared it to the Division of Nursing’s
demand projection. The researchers obtained data from the Census Bureau’s Current
Population Survey on employment trends of RNs over their worklives to project the
number of full-time equivalent RNs by single year of age between 2000 and 2020. In
addition, they gathered information on college freshmen’s career plans from a survey
by the Higher Education Research Institute, University of California-Los Angeles.
The researchers estimated that the absolute number of RNs could begin to contract
in 2012 because the smaller groups of women that have followed the baby-boom
women into the labor force have had a wider range of job opportunities open to them
and consequently, have been less prone to choose a career in nursing.15 Not only
could the decreased likelihood of young women becoming RNs reduce the total
supply of labor to the occupation, but the analysts also found that it could well result
in the RN workforce aging more rapidly than other occupations. The authors
compared their supply projections with the Division of Nursing’s demand projections
and concluded that a shortage could develop about when the oldest members of the
baby-boom generation begin retiring from the labor force and enrolling in the
Medicare program. By 2020, once again assuming no pre-emptive steps by employers
or the government, the demand for RNs could exceed the supply by 20%.16
14(...continued)
are then aggregated to yield a national projection while the BLS model makes employment
projections for the United States as a whole.
15Stager, Douglas O., with David I. Auerbach and Peter I. Buerhaus. Expanding Career
Opportunities for Women and the Declining Interest in Nursing as a Career. Nursing
Economics, September-October 2000, v. 18, no. 5. For example, women who graduated from
high school in the 1990s were estimated to be 30-40% less likely to enter the nursing
profession than those who graduated 20 years earlier. Other female-dominated occupations
have witnessed a similar decline in interest (e.g., elementary school teachers). Conversely,
women have shown an increased interest in traditionally male-dominated occupations (e.g.,
doctors or dentists).
16Buerhaus, Peter I., with Douglas O. Staiger and David I. Auerbach. Implications of an
Aging Registered Nurse Workforce. Journal of the American Medical Association, June 14,
2000, v. 283, no. 22. (Hereafter cited as Buerhaus, Staiger and Auerbach, Implications of
an Aging Registered Nurse Workforce.)
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Table 6. The Second Comparison of Projected Supply and
Demand in the RN Labor Market
Supply of full-time
Demand for full-time
Year (as of December 31)
equivalent RNsa
equivalent RNsa
1998
1,926,000
1,915,000
1999
1,957,000
1,943,000
2000
1,987,000
1,969,000
2001
2,014,000
1,999,000
2002
2,045,000
2,024,000
2003
2,075,000
2,048,000
2004
2,103,000
2,071,000
2005
2,128,000
2,095,000
2006
2,150,000
2,122,000
2007
2,169,000
2,148,000
2008
2,185,000
2,174,000
2009
2,197,000
2,202,000
2010
2,214,000
2,232,000
2011
2,232,000
2,262,000
2012
2,247,000
2,292,000
2013
2,256,000
2,322,000
2014
2,266,000
2,355,000
2015
2,277,000
2,391,000
2016
2,285,000
2,423,000
2017
2,290,000
2,459,000
2018
2,284,000
2,493,000
2019
2,281,000
2,532,000
2020
2,284,000
2,575,000
Source: National Advisory Council on Nurse Education and Practice. Report to the Secretary of
the Department of Health and Human Services on the Basic Registered Nurse Workforce. Health
Resources and Services Administration, Bureau of Health Professions, Division of Nursing, 1996.
a The full-time equivalent for part-time workers was calculated by applying the ratio of average
scheduled hours of part-timers to average scheduled hours of full-timers.
CRS-15
Current Labor Market Conditions for RNs
Given the absence of a direct measure of occupational labor shortages, analysts
use a variety of indicators. The unemployment rate is perhaps the “best-known
example of such an indicator,” but relying on just one indicator “can still lead to an
incorrect conclusion” about the existence of a labor shortage.17 Other often used,
regularly collected indicators include the trend in wages and in employment.
The Unemployment Rate. As shown in Table 7, the proportion of
experienced RNs without jobs has been very low for quite some time. The jobless
rate also has remained below the rate for all professional workers, the larger
occupational group in which RNs are classified. However, the gap between the
unemployment rate of RNs and professionals was almost twice as wide in 2000 as in
1989, the last pre-recession peak and the last time there was concern about a nursing
shortage. This suggests that employers trying to hire nurses today may be
encountering more than the usual degree of labor scarcity consistent with a prolonged
period of economic growth and an even tighter labor market than gave rise to earlier
actions to remedy a perceived shortage of RNs.
17Cohen, Malcolm S. Labor Shortages as America Approaches the Twenty-first Century.
Ann Arbor, MI, University of Michigan Press, 1995. p. 25. (Hereafter cited as Cohen, Labor
Shortages as America Approaches the Twenty-first Century.)
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Table 7. Employment, the Unemployment Rate and Median
Weekly Earnings of Registered Nurses and of Professionals
Overall, 1989-2000
Total employment (in
Experienced
Median weekly
thousands)
unemployment ratea
earningsb
Year
All
All
All
RNs
profes-
RNs
profes-
RNs
profes-
sionals
sionals
sionals
1989
1,599
15,550
1.3
1.7
569
586
1990
1,667
15,800
1.1
2.0
608
610
1991
1,704
16,030
1.2
2.4
635
633
1992
1,799
16,370
1.1
2.6
662
658
1993
1,855
16,893
1.3
2.6
687
680
1994
1,956
17,536
1.5
2.5
682
705
1995
1,977
18,132
1.5
2.5
695
718
1996
1,986
18,752
1.4
2.3
697
730
1997
2,065
19,245
1.5
2.1
710
750
1998
2,032
19,883
1.3
1.9
739
763
1999
2,128
20,883
1.1
1.9
750
800
2000
2,111
21,113
1.0
1.7
790
832
Source: U.S. Bureau of Labor Statistics. Employment and Earnings, January issues
of various years, and unpublished data from the Current Population Survey which
queries households.
a The experienced unemployment rate covers persons who had jobs as RNs immediately before their
spell of unemployment, that is, it excludes new entrants and re-entrants to the RN labor force. The
employment and unemployment rate series cover all employed persons.
b Median weekly earnings cover wage and salary workers employed full-time. Somewhat more
employed RNs work part-time (28%) compared to all professional workers (21%) according to
Division of Nursing and BLS data, respectively.
CRS-17
At that time, the situation
prompted passage of the Nursing Shortage Reduction and Education Extension
Act and implementation of the Immigration Nursing Relief Act of 1989. Soon
after reports of shortages, however, the overall economic picture began to change.
The hospital industry responded by increasing overtime work, retention and
recruitment efforts, and nursing wages [as well as restructuring work to utilize
nursing aides and licensed practical nurses, among others, in lieu of RNs].18
These measures succeeded in increasing the supply of RNs by, among other things,
enticing more students to enter the field. As shown in Table 2, the number of
graduates from nursing degree programs climbed sharply during the early 1990s. In
addition, the share of RNs who maintained their licenses but were not employed in
nursing dropped from 20.0% in 1988 to 17.3% in 1992, which suggests that these
measures prompted some RNs to return to the occupation.19 Consequently, reports
of a nursing shortage petered out early in the decade.
Wage Increases. If occupational demand is nearing or surpassing supply,
economic theory suggests that employers will bid up wages to attract workers and
thereby restore balance to the labor market. “Thus, rapidly rising wages are
consistent with a labor shortage.”20 Between 1989 and 1993, wages increased more
among RNs (20.7%) than across all professional employees (16.0%). (See Table 7)
The pattern reversed thereafter, due in part to the development and spread of
managed care (i.e., an arrangement used to control the use, and hence, the cost of
health services provided to enrollees in many health plans).21
The relatively slower wage growth among RNs since mid-decade could account
for the decreased number of graduates from nursing degree programs (see Table 2).
It also could account for the increased share of RNs not employed in nursing: RNs
who were not employed in nursing rose from 17.3% in 1992 and 1996, to 18.3% in
2000.22 Although nurses’ wages did rise at an above-average rate in 2 recent years
18Veneri, Carolyn M. Can Occupational Labor Market Shortages be Identified Using
Available Data? Monthly Labor Review, March 1999. p. 17 and 20.
19HRSA, National Sample Survey of Registered Nurses.
20Cohen, Labor Shortages as America Approaches the Twenty-first Century, p. 33.
21Buerhaus, Peter I. and Douglas O. Staiger. Trouble in the Nurse Labor Market? Recent
Trends and Future Outlook. Health Affairs, January/February 1999, v. 18, no. 1. (Hereafter
cited as Buerhaus and Staiger, Trouble in the Nurse Labor Market?)
22HRSA, National Sample Survey of Registered Nurses.
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(1998 and 2000),23 employers have thus far raised RNs’ wages to a lesser extent than
they did during the last alleged shortage.
The efficacy of higher wages at increasing the supply of already employed RNs,
as measured by their number of work hours, is open to question. According to a
survey that was administered to nurses who became licensed in New York State in
1999, 40% said they would be willing to work more hours if offered a higher salary.
Another 44% indicated that there were factors other than higher salaries that would
motivate them to put in longer hours (i.e., flexible hours, speciality of choice, different
shift or hours and other conditions), while 16.0% stated that they would not be willing
to do so under any conditions.24 The objection of nurse advocates to hospitals’
current use of mandatory overtime to cope with a dearth of staff may reflect the
unwillingness of arguably overburdened RNs to work more hours or to continue in
nursing under the present state of working conditions, in part because fatigue might
compromise the quality of care being rendered.25
Employment Growth. If an occupational shortage exists, comparatively fast-
paced employment increases are expected as well. Between 1989 and 1994, job
growth among RNs occurred much more rapidly than among professionals in general
(22.3% and 12.8%, respectively). (See Table 7) Since then, however, the relative
trend in employment is not consistent with the presence of a shortage: between 1995
and 2000, employment of RNs grew by 6.8% compared to 16.4% for all
professionals.
The slowdown in job growth among RNs in the last several years appears to be
at least partly related to the spread of managed care across the nation. The
diminished rate of RN employment growth has been concentrated in hospitals,
23The size of reported wage increases can vary greatly depending on such things as the
definition of the occupation, how well the sample reflects the population from which it was
drawn, the relative size of the sample and the rate of response to the survey. Based on data
for hundreds of occupations that were culled from the Current Population Survey, which
queries about 60,000 households each month and is conducted by the Census Bureau, the BLS
reported an increase of 5.3% between 1999 and 2000 in the median weekly earnings of full-
time wage and salary workers employed as RNs. In contrast, a health care staffing and
consulting firm reported an 11.4% gain in nurses’ average annual salary in 2000. (Health
Workforce: In 2000, Average Salaries for Nurses Rose 11 Percent, Healthcare Consulting
Firm Says. Health Care Daily, April 30, 2001.)
24Salsberg, Edward S. State Nursing Shortage Issues: New York. Presentation at conference,
Hard Numbers, Hard Choices: A Report on the Nation’s Nursing Workforce, held February
14, 2001 in Washington, D.C.
25See, for example: Aiken, Linda H., with Sean P. Clarke, Douglas M. Sloane, Julie A.
Sochalski, Reinhard Busse, Heather Clark, Phyllis Giovannetti, Jennifer Hunt, Anne Marie
Rafferty and Judith Shamian. Nurses’ Reports on Hospital Care in Five Countries. Health
Affairs, May/June 2001; American Nurses Association. Nurses Concerned Over Working
Conditions, Decline in Quality of Care, ANA Survey Reveals. Press Release, February 6,
2001. Copy of the press release and survey are available at: [http://www.nursingworld.org];
and Federation of Nurses and Health Professionals. The Nurse Shortage: Perspectives from
Current Direct Care Nurses and Former Direct Care Nurses. April 2001.
CRS-19
although there are indications that the RN job creation rate in the home health
industry has decreased as well. “Medicare’s implementation of a prospective payment
system for the home health care industry ... place[s] new economic pressure on
providers and reinforces the slowing effect of managed care.26
As previously mentioned, accounts of the current scarcity of RNs largely relate
to certain specialties (e.g., those capable of staffing hospital emergency rooms) and
to certain parts of the country. For example, the Division of Nursing’s projections for
2000 anticipated a perfect match between RN supply and demand in one region (the
Middle Atlantic) and a shortage in three other of the nation’s nine regions (New
England, South Atlantic and Pacific).27 In addition, certain health care facilities (e.g.,
nursing homes) may be experiencing more difficulty than others in attracting adequate
staff in part resulting from differences in the salaries offered to RNs.28 Data at the
national level, for all kinds of RNs and for all types of health care workplaces are not
sufficiently sensitive to identify a maldistribution, as opposed to a pervasive shortage,
of RNs. These kind of maldistributions could remain “spot” shortages or be
harbingers of a more widespread nursing shortage to come.
Concluding Remarks
It cannot be stated conclusively, based upon the available labor market
indicators, that an across-the-board shortage of RNs currently exists. There is more
convincing evidence pointing toward supply in the RN labor market failing to meet
demand beginning sometime around 2010, unless ameliorative actions are undertaken.
The impending nationwide shortage is likely to differ from those of the past as
it seemingly will be driven by supply-side demographics that may not be easily or
quickly undone.29 Employers can be expected to try to correct the developing supply-
demand imbalance in the RN labor market by further increasing nurses’ wages,
assigning some duties now performed by RNs to paraprofessional nursing personnel
and utilizing additional productivity-enhancing technology. These remedies were used
successfully in the past when RNs were scarce relative to demand, but the earlier
situations were not marked by an aging RN labor force with the attendant need to
replace many retiring nurses at about the same time older baby-boomers will make
26Buerhaus and Staiger, Trouble in the Nurse Labor Market? p. 221.
27National Advisory Council on Nurse Education and Practice. Report to the Secretary of the
Department of Health and Human Services on the Basic Registered Nurse Workforce.
Health Resources and Services Administration, Bureau of Health Professions, Division of
Nursing, 1996.
28For more information see: American Health Care Association. Staffing of Nursing Services
in Long Term Care: Present Issues and Prospects for the Future. February 2001.
Available at: [http://www.acha.org/news/staff-02-2001.htm].
29While the portended shortage is expected to be driven by supply factors, the tight labor
market for nurses in the late 1980s/early 1990s, for example, was spurred by heightened
demand. Aiken, Linda H. The Hospital Nursing Shortage: A Paradox of Increasing Supply
and Increasing Vacancy Rates. The Western Journal of Medicine, July 1989, v. 151, no. 1.
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greater demands on the nation’s health care delivery system.30 While raising relative
wages, improving working conditions, upgrading the occupation’s image and
lowering education costs to promote recruitment may encourage more students to
become RNs, these changes could take some time to make themselves felt and their
effects could be dampened by the alternative career paths now open to women.
Another means of bringing more workers into the field is through immigration.31
However, “eliminating the shortage would require immigration on an unprecedented
scale,”32 and as happened when the 105th and 106th Congresses increased the number
of H-1B visas for professional/specialty workers, the policy could prove to be a
controversial one.
30American Organization of Nurse Executives. Perspectives on the Nursing Shortage: A
Blueprint for Action. October 2000. Available at: [http://www.aone.org].
31According to the latest available data from the Immigration and Naturalization Service
(INS), there were 2,500 RNs admitted to the United States in 1998 as legal permanent
residents under either the family-based or employment-based categories. The INS estimates
that 10,000 Canadians are now working temporarily in the United States as RNs on Trade
NAFTA visas. Although foreign nursing graduates also may recently have entered the
country as temporary workers on H-1B (professional/specialty occupation) visas, their
numbers are likely to be relatively small because employers have largely been bringing in
information technology workers in the visa category. (The number of H-1B visas issued in
FY2000 hit the cap of 115,000. The 106th Congress raised the visa limit to 195,000 annually
between FY2001 and FY2003.) In addition, the H-1C visa program allows only 500
nonimmigrant nurses to enter the country each year to work temporarily in health professional
shortage areas.
32Buerhaus, Staiger and Auerbach, Implications of an Aging Registered Nurse Workforce,
p. 2953. The authors noted in Policy Responses to an Aging Registered Nurse Workforce,
Nursing Economics, November/December 2000, v. 18, no. 6, that by 2020 the supply of full-
time equivalent RNs could be 400,000 fewer than needed to meet employer demand.