A Shortage of Registered Nurses: Is It on the Horizon or Already Here?

A Shortage of Registered Nurses: Is It on the Horizon or Already Here?

Order Code RL30974
Report for Congress
Received through the CRS Web
A Shortage of Registered Nurses:
Is It on the Horizon or Already Here?
Updated August 19, 2002
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
Labor shortages in various occupations and industries were reported during the
late stages of the nation’s longest economic expansion, which ended in early 2001.
The unemployment rate in some fields (e.g., nursing) has remained virtually
unchanged despite the advent of the recession, which suggests that there are factors
unrelated to the business cycle affecting them. For example, the increasing longevity
and wealth of the population combined with a growing share of elderly persons are
putting added pressure on the health care delivery system, and these trends are
expected to continue. Moreover, although women continue to account for the
majority of workers in many health care occupations, their career opportunities have
widened over time. And, among women who already are licensed RNs, many are
expected to retire in the not-too-distant future while others have chosen to work in
non-nursing occupations.
Thus, health care providers who previously might have thought their supply of
labor was fairly well assured must now compete for the interest of students based on
nursing’s attractiveness vis-a-vis other occupations. They also could become more
concerned about retaining their aging RN workforce and about appealing to licensed
RNs who are otherwise employed. During the mid-1990s, however, earnings growth
among RNs slowed compared to earlier in the decade, and their wage increases were
smaller than those of all professional workers. This could partly explain the drop in
nursing program graduates that began in the 1995-1996 academic year and the greater
share of RNs not employed in nursing in 2000 as compared to 1992 and 1996.
Trends such as these underlie the supply and demand projections for RNs
released by the U.S. Health Resources and Services Administration (HRSA). While
the agency’s own 1996 projections and those of analysts based in part on them
strongly suggested the likelihood of a shortage of RNs beginning in 2007 or shortly
thereafter, HRSA’s July 2002 projections push forward the overall RN shortage to
2000. If current trends continue and ameliorative actions are not taken, HRSA
projects that the aggregate shortfall could worsen at an accelerating rate — from 6%
in 2000 to 12% by 2010; then rising to 20% by 2015; and climbing to 29% by 2020.
Not all states currently are sharing in the RN shortage, nor are those with
shortages sharing equally, according to HRSA’s latest projections. Thirty states were
estimated to have a shortfall of full-time equivalent (FTE) RNs in 2000, and the
severity of shortages varied widely — from under 4% in Iowa, Minnesota, and
Oregon to at least 13% in Arizona, New Jersey, and Tennessee. By 2005, perhaps
seven states (Alabama, Florida, Idaho, Maryland, North Dakota, Oklahoma, and
Wyoming) could experience a shortage as well. Another three states by 2010
(Illinois, Michigan, and South Carolina) and seven more by 2015 (Louisiana,
Minnesota, Montana, North Carolina, South Dakota, West Virginia, and Wisconsin)
could have an inadequate supply. If Mississippi moves into a shortage situation by
2020, just six states might remain with more FTE RNs than are demanded (Hawaii,
Iowa, Kansas, Kentucky, Ohio, and Vermont).

Contents
Who Are We Talking About? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Trends in the RN Labor Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
The Experienced Unemployment Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Wage Increases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Employment Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Projected Demand for RNs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Future RN Job Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Future RN Job Openings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Projected Supply of RNs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
The Trend in Nursing Graduates and Enrollments . . . . . . . . . . . . . . . . . . . 11
The Total Supply of RNs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
A Shortage of Registered Nurses? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
National Projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
State Projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
List of Tables
Table 1. The Unemployment Rate, Median Weekly Earnings, and
Employment of RNs and of All Professionals, 1989-2001 . . . . . . . . . . . . . . 6
Table 2. Projected Employment of RNs in Hospitals and Across
All Industries, Selected Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Table 3. Projected Supply of RNs, Selected Years . . . . . . . . . . . . . . . . . . . . . . . 13
Table 4. Projected Shortages of RNs, Selected Years . . . . . . . . . . . . . . . . . . . . 14

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) were reported a few years before a
recession began in March 2001. It is not unusual for employers to have difficulty
hiring and retaining employees after the economy has been expanding for quite some
time, and the nation experienced the longest period without a recession in U.S.
history from March 1991 to March 2001. What makes the current situation different,
however, is that the unemployment rate at the peak of the latest economic expansion
was lower than at many of the prior cyclical peaks, and the rate since the recession
began remains low compared to many other recessions.1
In other words, the labor market was and continues to be tight by historical
standards in certain occupations and industries. For example, the unemployment rate
in 2001 among workers who had been employed as registered nurses (RNs) was
1.0%, compared to the average for all professional workers of 2.2%.2 Perhaps not
surprisingly, then, reports have continued to appear about hospitals and nursing
homes in various areas of the country having difficulty hiring enough RNs to fill their
numerous vacant positions.
There thus appear to be factors unrelated to the business cycle that are affecting
the labor markets of certain industries and occupations. 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.3 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
1In March 2001, the unemployment rate was 4.3%. The unemployment rate at five of the
prior nine post-war peaks in the business cycle was higher: 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). Since the 2001
recession began, the highest unemployment rate attained thus far has been 6.0%. In contrast,
the highest unemployment rates of the prior recessions were: 6.8% (1990-1991 recession),
10.8% (1981-1982), 7.8% (1980), 8.6% (197-1975), 5.9% (1969-1970), 6.9% (1960-1961),
7.4% (1957-1958), 5.9% (1953-1954), and 7.9% (1948-1949 recession).
2U.S. Bureau of Labor Statistics. Unpublished data from the Current Population Survey
(CPS). (Hereafter cited as BLS, unpublished CPS data.)
3Wunderlich, Gooloo, with Frank A. Sloan and Carolyne K. Davis (eds.). Nursing Staff in
Hospitals and Nursing Homes. Washington, D.C., National Academy Press, 1996.

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care personnel might jeopardize the quality of patients’ care.4 Moreover, although
women continue to account for the majority of staff in many health care jobs,5 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 there is an ongoing nationwide shortage of
RNs of various kinds (ranging from new nursing program graduates to already
employed RNs with general skills, to nurses with experience working in hospital
specialty care units) and in various sectors of the health care services industry
(including hospitals, home health, and nursing homes). Before the latest (mid-2002)
release of supply-demand projections from the U.S. Health Resources and Services
Administration (HRSA), it was estimated, based in whole or part on 1996 HRSA
projections, that there would likely be a shortage of RNs in 2007 or shortly thereafter.
This report first will analyze recent trends in the RN labor market and then examine
HRSA’s new projections, which moved up the date of an RN shortage to 2000.
Who Are We Talking About?
The exact nature of RNs’ daily duties usually depends on the setting in which
they work.6
! 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 services 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
4Joint Commission on Accreditation of Healthcare Organizations. Health Care at the
Crossroads: Strategies for Addressing the Evolving Nursing Crisis. August 2002.
Available at [http://www.jcaho.org].
5In 2001, women accounted for 94.3% of licensed practical nurses; 93.1% of registered
nurses; and 90.1% of nursing aides, orderlies and attendants. U.S. Bureau of Labor
Statistics. Employment and Earnings, January 2002.
6All information in this section is drawn from U.S. Bureau of Labor Statistics. Occupational
Outlook Handbook 2002-03 Edition, unless otherwise noted. Available at
[http://stats.bls.gov/oco/pdf/ocos083.pdf]. (Hereafter cited as BLS, Occupational Outlook
Handbook.)

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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, help with
injections, and assess work environments for potential health/safety problems.
! 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 and to ensure the proper delivery of care.”
! 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, certified registered
nurse anesthetists, and certified nurse-midwives. They all must fulfill higher
educational and clinical experience requirements than those established for the
aforementioned groups.
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 60% of RNs in 1980 graduated from
diploma programs, the share who received their basic nursing education from this
source was halved, to 30%, by 2000.7 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.
Trends in the RN Labor Market
No direct measure of occupational labor shortage exists. Analysts therefore use
a variety of indicators to assess supply-demand conditions. 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.8 Other often used indicators that the government has regularly collected
7U.S. Department of Health and Human Services. Health Resources and Services
Administration. The Registered Nurse Population: Findings from the National Sample
Survey of Registered Nurses — March 2000. July 2002. Available at
[http://www.bhpr.hrsa.gov/healthworkforce/rnsurvey]. (Hereafter cited as HRSA, The
Registered Nurse Population.)
8Cohen, Malcolm S. Labor Shortages as America Approaches the Twenty-first Century.
Ann Arbor, MI, University of Michigan Press, 1995. p. 25.

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and that have used consistent definitions over time include earnings and
employment.9
The Experienced Unemployment Rate
As shown in Table 1, the share of experienced RNs without jobs has been very
low for quite some time and has remained below the rate for professional workers in
general, the larger occupational group in which RNs are classified. In the late stages
of the economic expansion, however, the unemployment rate of RNs dropped to
levels last seen in the 1989-1992 period — when there last was concern about a
nursing shortage.
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].10
These measures succeeded in increasing the supply of RNs by, among other things,
enticing more students to enter the field. The number of graduates from nursing
degree programs climbed sharply — by 57.4% or 35,392 graduates — from the 1989-
1990 academic year to the 1994-1995 academic year.11 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 and remained at that level in 1996, which suggests that
9The government does not have a data series on occupational vacancies, and like the other
indicators, vacancies in themselves are an insufficient measure of labor shortage. An
occupation could have both a high unemployment rate (which suggests excess supply) and
a high vacancy rate (which suggests excess demand) if employers and workers find it
difficult to make matches due to the different locations of job openings and of workers. The
same situation also could indicate a skill mismatch rather than a shortage per se if, for
example, hospitals want to fill vacancies with RNs having experience in specialty care units
rather than with new RN graduates. A high vacancy rate would be more suggestive of a
supply problem if employers could not fill openings quickly, but surveys do not appear to
always ask about the duration of openings. A high vacancy rate also would be more
suggestive of a shortage if information were provided showing that the unfilled jobs offered
salaries that were sufficiently competitive to attract any available workers (e.g., licensed
RNs employed in other occupations). In addition, as the U.S. General Accounting Office
(Nursing Workforce: Emerging Nurse Shortages Due to Multiple Factors, GAO-01-944,
July 2001) noted, one should be cautious when comparing different studies’ vacancy rates
because they may not all calculate rates in the same way.
10Veneri, Carolyn M. Can Occupational Labor Market Shortages be Identified Using
Available Data? Monthly Labor Review, March 1999. p. 17 and 20.
11HRSA. United States Health Workforce Personnel Factbook. Available at
[http://www.bhpr.hrsa.gov/healthworkforce/factbook.htm]. (Hereafter cited as HRSA,
United States Health Workforce Personnel Factbook.)

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these measures prompted some RNs to return to the occupation.12 Consequently,
reports of a nursing shortage petered out early in the 1990s.
Unlike the earlier episode of a seeming shortage, health care providers already
have increased their use of overtime to the point where it has drawn the ire of many
RNs and their representatives. Some states have introduced or passed legislation to
curb its use.13 In addition, the change in economic conditions between 2000 and
2001 does not appear to have improved the availability of RNs relative to demand:
despite the advent of the latest recession in March 2001, the experienced
unemployment rate among RNs remained virtually unchanged from its 2000 level.
However, employers seemingly have not raised RN earnings in the last few years to
the same extent they did during the late 1980s/early 1990s (see below).
Wage Increases
Between 1989 and 1993, full-time RNs’ median weekly wages increased more
than those of all professional employees (20.7% and 16.0%, respectively, as shown
in Table 1). HRSA estimated that full-time RNs increased their average annual
earnings to an even greater degree, namely, by one-third (from $28,383 in 1988 to
$37,738 in 1992).14
The pattern reversed through 1997, as can be seen in the BLS data contained in
Table 1. HRSA’s data also reveal a slowdown in RN average earnings growth, to
11.5%, between 1992 ($37,738) and 1996 ($42,071). The reversal has been partly
ascribed to the development and spread of managed care (an arrangement used to
control the use, and hence, the cost of health services provided to enrollees in many
health plans).15
12HRSA. Preliminary Findings from the National Sample Survey of Registered Nurses —
March 2000. February 2001.
13Urban Institute. Skill Shortages and Mismatches in Nursing Related Health Care
Employment. Prepared for the U.S. Department of Labor. April 2002.
14HRSA, The Registered Nurse Population. Note: The 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. In the case of the BLS and HRSA wage data, the former
calculates a median and the latter, a mean wage, which can be pulled up by a few large
observations. Because BLS classifies workers according to their principal activity, such
comparatively high-paid RNs as administrators and managers are omitted from the BLS’ RN
wage calculation. They are captured in HRSA’s database which includes all individuals
with RN licenses.
15Buerhaus, 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?); and Schumacher,
Edward J. The Earnings and Employment of Nurses in an Era of Cost Containment.
Industrial and Labor Relations Review, October 2001, v. 55. no. 1. (Hereafter cited as
Schumacher, The Earnings and Employment of Nurses.)

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Table 1. The Unemployment Rate, Median Weekly Earnings,
and Employment of RNs and of All Professionals, 1989-2001
Experienced
Median weekly
Total employment
unemployment ratea
earningsb
(in thousands)
Year
All
All
All
RNs
profes-
RNs
profes-
RNs
profes-
sionals
sionals
sionals
1989
1.3
1.7
569
586
1,599
15,550
1990
1.1
2.0
608
610
1,667
15,800
1991
1.2
2.4
635
633
1,704
16,030
1992
1.1
2.6
662
658
1,799
16,370
1993
1.3
2.6
687
680
1,855
16,893
1994
1.5
2.5
682
705
1,956
17,536
1995
1.5
2.5
695
718
1,977
18,132
1996
1.4
2.3
697
730
1,986
18,752
1997
1.5
2.1
710
750
2,065
19,245
1998
1.3
1.9
739
763
2,032
19,883
1999
1.1
1.9
750
800
2,128
20,883
2000
1.0
1.7
790
832
2,111
21,113
2001
1.2
2.2
829
854
2,162
21,556
Source: U.S. Bureau of Labor Statistics. Employment and Earnings, January issues of various years,
and unpublished data from the Current Population Survey.
a The experienced unemployment rate covers persons who had jobs as RNs immediately before their
spell of unemployment (i.e., 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.
The relatively slower wage growth among RNs in the mid-1990s could partly
explain the drop in graduations from nursing degree programs that began in the 1995-
1996 academic year.16 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 2000.17
The median weekly earnings of RNs since 1997 have been rising more rapidly
compared to those of all professionals (16.8% and 13.9%, respectively), and
16HRSA, United States Health Workforce Personnel Factbook.
17HRSA, National Sample Survey of Registered Nurses.

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compared to their own rate of increase during the 1993-1997 period (3.3%). Unlike
the BLS wage series shown in Table 1, HRSA’s data do not show a similar
acceleration in wage growth from the mid-1990s: the average annual pay of full-time
RNs increased by 11.2% between 1996 ($42,071) and 2000 ($46,782), or by virtually
the same rate (11.5%) as between 1992 and 1996.
Both wage series show a smaller earnings increase in recent years compared to
the last time their was a tight labor market for RNs. As shown in Table 1, employers
raised RNs’ wages in the 1997-2001 period (16.8%) by less than they did in the
1989-1993 period (20.7%). Similarly, HRSA’s surveys provide estimates of
relatively smaller earnings growth between 1996 and 2000 (11.2%) than between
1988 and 1992 (32.9%). However, some assert that as a result of the introduction
and spread of cost containment measures in the health care industry, providers are
less financially able today than they were in the past to deal with a labor shortage by
raising the wages of RNs or by hiring more RNs directly or through temporary
agencies.18
The efficacy of higher wages at increasing the supply of already employed RNs
relative to demand, 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.19 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.20
Employment Growth
Between 1989 and 1994, job growth among RNs occurred much more rapidly
than across all professionals (22.3% and 12.8%, respectively; see Table 1). Between
18Jacklevic, Mary Chris and Ed Lovern. A Nursing Code Blue. Modern Healthcare,
December 11, 2000.
19Salsberg, 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.
20See, 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.

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1995 and 2001, however, relative employment growth among RNs (9.4%) lagged
employment growth among all professionals (18.9%).
The slowdown in RN job growth in the last several years appears to be at least
partly related to the spread of managed care across the nation.21 The diminished rate
of growth has been concentrated in hospitals, 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.22
The nature of the demand for RNs by work setting and by geographic area also
could have tempered the occupation’s aggregate rate of employment growth.
Accounts of an undersupply of RNs often have related to particular settings (e.g.,
hospital emergency rooms) and to particular parts of the country. 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.23 The labor market indicators just discussed do not conclusively
support the existence of an across-the-board shortage of RNs in the past few years;
however, national data are not sufficiently sensitive to identify a maldistribution of
RNs across geographic areas and by kinds of RNs and health care workplaces (e.g.,
new nursing school graduates versus nurses with experience in hospital emergency
rooms or neonatal care units) as opposed to a shortage of labor per se.
Projected Demand 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.
This is the job creation discussed immediately below. Hiring also may increase if 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. “Replacement needs,”
discussed shortly, may increase the demand for labor well beyond that induced by
employment growth.
Future RN Job Growth
Hospitals are likely to continue to employ the majority of RNs in future years,
albeit a decreasing share. As HRSA reported in 2002, the number of full-time
equivalent (FTE) RNs estimated to have worked in hospitals in 2000 was 1,242,831;
21Schumacher, The Earnings and Employment of Nurses.
22Buerhaus and Staiger, Trouble in the Nurse Labor Market? p. 221.
23For 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].

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the projection for 2010 is 1,451,083.24 According to the BLS, the number of RNs
employed part-time and full-time in hospitals in 2000 was 1,274,031; the projection
for 2010 is 1,465,831.25 (See Table 2.)
RN employment in hospitals is projected to grow slowly (between 15.0% and
16.8%) compared to RN employment in other settings because activities once
performed on an inpatient basis increasingly are being performed on an outpatient
basis, either in hospitals or elsewhere, and because patients are being discharged
earlier. Despite the assumption that the number of inpatients will not grow much,
“the intensity of nursing care is likely to increase, requiring more nurses per
patient.”26
The ranks of RNs already employed in large numbers at other work settings are
expected to expand substantially. This appears to be particularly the case for RNs
employed in workplaces that largely serve the elderly. For example, employment of
nurses in the home health sector is projected to increase by 36.3% between 2000 and
2010, from 130,288 to 177,583 FTEs. Similarly, RNs employed at nursing homes
are projected to increase by 32.4%, from 168,529 to 223,193 FTEs.27 The preference
of people to be cared for in their homes, new technologies that permit complex
treatments to be performed at home, the “growing number of older persons with
functional disabilities, ... many of whom will require long-term care,” and “the
financial pressure on hospitals to [quickly] discharge patients” who may require
further care in nursing homes or other treatment facilities contribute to these
disparate projected trends in RN employment by work setting.28
Across the entire health care industry, the rate of employment growth between
2000 and 2010 that BLS projects among RNs (25.6%) is even greater than that of
HRSA (17.2%). (See Table 2.) Demand for RNs through 2010 could be above the
average across all occupations (15.2%), and nursing is among the occupations
expected to add the most new jobs over the 10-year period (561,000 part-time and
24HRSA. Projected Supply, Demand, and Shortages of Registered Nurses: 2000-2020. July
2002. Available at [http://www.bhpr.hrsa.gov/healthworkforce/rnproject/default.htm].
(Hereafter cited as HRSA, Projected Supply, Demand, and Shortages of Registered Nurses.)
25BLS. Industry-Occupation Employment Matrix. (Hereafter cited as BLS, Industry-
Occupation Employment Matrix.) Note: In addition to the obvious difference that HRSA’s
figures are expressed as FTEs while BLS’ are a count of persons employed regardless of
part-time/full-time status, the two differ in other respects including: BLS categorizes
individuals by their principal work activity rather than by credential as does HRSA so, for
example, BLS classifies RNs who largely teach or manage in non-nursing occupations;
HRSA’s base-year employment is derived from a survey of licensed nurses while BLS’
base-year employment is derived from a survey of employers; and they utilize different
projection methodologies.
26BLS, Occupational Outlook Handbook.
27HRSA, Projected Supply, Demand, and Shortages of Registered Nurses.
28BLS, Occupational Outlook Handbook.

CRS-10
full-time workers).29 An aging population that is more likely to need medical care,
a population that also is wealthier and therefore can afford better care, and
technological advances that allow more medical problems to be treated more
aggressively underlie the considerable increase in demand for RNs anticipated in the
next several years.
Table 2. Projected Employment of RNs in Hospitals
and Across All Industries, Selected Years
Employment (full-time
Employment (part-time
equivalents)
and full-time workers)
Registered nurses by
Percent
Percent
Number
Number
industry
change
change
Hospitals
2000
1,242,831a
—
1,274,031
—
2010
1,451,083
16.8
1,465,831
15.0
2020
1,741,639
20.0
n.a.
—
All industries
2000
1,999,950b
—
2,194,224
—
2010
2,344,584
17.2
2,755,325
25.6
2020
2,810,414
19.9
n.a.
—
Source: Full-time equivalent employment figures from HRSA, Projected Supply, Demand, and
Shortages of Registered Nurses: 2000-2020. Part-time and full-time employment figures from BLS,
Industry-Occupation Employment Matrix.
Note: HRSA classifies all persons with RN licenses as registered nurses while BLS classifies
individuals by their principal work activity so, for example, BLS does not include those RNs who
largely work as teachers and managers in its count of nurses.
a In March 2000, according to HRSA’s Findings from the National Sample Survey of Registered
Nurses, the number of RNs employed part-time and full-time in hospitals was 1,300,323. Some
28.2% (or 366,962) worked part-time.
b In March 2000, according to HRSA’s Findings from the National Sample Survey of Registered
Nurses, the total number of RNs employed part-time and full-time in nursing was 2,201,813.
Approximately 28.4% (or 625,139) worked part-time.
Future RN Job Openings
The need to replace workers across all industries will accelerate as more
members of the baby-boom generation (the large group born between 1946 and 1964)
retire. Health care providers generally, and hospitals particularly (as the largest
29Hecker, Daniel. Occupational Employment Projections to 2010. Monthly Labor Review,
November 2001. (Hereafter cited as Hecker, Occupational Employment Projections.)

CRS-11
employer of RNs), could be among the industries most affected by this demographic
phenomenon because the proportion of nurses at least 45 years old is greater than the
average proportion across all occupations.30 The average age of RNs employed in
nursing in 2000 was 43.3 years, with 45.5% age 45 and older.31
Of the one million total job openings projected for RNs through 2010, 44%
could arise through the need to replace workers who exit the occupation rather than
through employment growth.32 Not all job openings are created by individuals who
leave an occupation for retirement, however. RNs, for example, most frequently
indicated in a HRSA survey that they were employed in occupations other than
nursing because the positions provided more convenient hours (45.7%), were more
rewarding professionally (44.9%), or currently offered better salaries (35.4%).33
Projected Supply of RNs
It usually is more difficult to estimate occupational labor supply than demand.
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 just on graduations from programs that
offer nursing degrees, 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 workers34 — 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.
In addition to the previously described demand projections released in 2002,
HRSA developed new supply projections. They are the basis for much of the
following discussion.
The Trend in Nursing Graduates and Enrollments
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.
30Dohm, Arlene. Gauging the Labor Force Effects of Retiring Baby-Boomers. Monthly
Labor Review, July 2000.
31HRSA, The Registered Nurse Population.
32Hecker, Occupational Employment Projections.
33HRSA, The Registered Nurse Population.
34Foreign 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-12
Between 1995 and 2000, the number of new RN graduates (based on individuals
passing the licensing test) dropped by 26.0%, from 96,610 to 71,475.35
The recent trend in enrollments — down over the past 5 years — does not bode
well for the supply of new entrants to the RN workforce in the short-run.
Baccalaureate enrollment did increase between 2000 and 2001; however, it takes
longer for these students to become licensed RNs compared to those in diploma and
associate degree programs. If BSN graduates continue to account for a growing share
of all nursing graduates, their lengthier preparation time effectively could dampen
growth in the supply of RNs.36
The Total Supply of RNs
HRSA projected the supply of graduates from basic nursing education programs
by taking into account such factors as job availability and the attractiveness of
nursing as a career, both of which would likely influence students’ decisions about
their choice of occupations in the future. Other variables included were the female
population of nursing students by age and the share of female high school graduates
enrolling in college. In addition, estimates of leavers were derived by taking into
consideration such things as deaths among white women and nurses who fail to
renew their licenses. Then, to estimate the total supply of RNs, “activity rates” were
developed based on the proportion of RNs by age group that was employed in
nursing in March 2000, according to the National Sample of Registered Nurses.
Finally, the count of individuals was transformed into FTEs based on data from the
same source about the pattern of full-time and part-time employment and the number
of scheduled hours per nurse.
As shown in Table 3, the total supply of FTE RNs is projected to increase
between 2000 and 2011. The rate of growth is expected to fall off during this period,
with the decline particularly steep after 2005, when an especially large number of
baby-boom RNs will start reaching 55 years of age — an age “at which RNs have
historically begun to reduce their labor participation.”37 The 3.6% projected decrease
in the supply of RNs from its peak in 2011 to 2020 might bring the total below its
2005 level.
35HRSA, Projected Supply, Demand, and Shortages of Registered Nurses.
36Ibid.
37Minnick, Ann F. Retirement, the Nursing Workforce, and the Year 2005. Nursing
Outlook, September/October 2000. p. 211.

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Table 3. Projected Supply of RNs, Selected Years
Change
Supply (in full-time
Year
equivalents)
Number
Percent
2000
1,889,243
—
—
2005
2,012,444
123,201
6.5
2011
2,075,891
63,447
3.1
2020
2,001,998
-73,893
-3.6
Source: HRSA, Projected Supply, Demand, and Shortages of Registered Nurses: 2000-2020.
A Shortage of Registered Nurses?
As discussed below in more detail, the latest projections from HRSA of supply
and demand conditions in the labor market for RNs pushed forward the time of a
shortage to 2000.38 The 1996 supply-demand projections of HRSA had shown a
national shortage in 2007. And, an alternative projection of the supply of RNs, when
compared with HRSA’s 1996 demand projection, revealed a shortage emerging
around 2012.39
Not all states are sharing in the present-day shortage of RNs, as determined by
HRSA’s latest estimates, nor are those with shortages sharing equally. If current
trends continue, and no mitigating actions are taken, the number of states
experiencing shortages is projected to increase and leave just a few without an RN
shortage by 2020.
National Projections
As shown in Table 4, nationwide demand for RNs was estimated to have
exceeded supply in 2000. The 5.5% shortfall is projected to worsen at an
accelerating rate through 2020, by which time there might be 28.8% fewer FTE RNs
than demanded by employers. This scenario assumes that policymakers and the
industry, among others, do not undertake ameliorative actions during the period.40
38HRSA, Projected Supply, Demand, and Shortages of Registered Nurses.
39Buerhaus, 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.
40For information on legislative activity see: CRS Report RL31090. Long-Term Care:
Nursing and Paraprofessional Workforce Issues, by Julie Stone and Rachel Kelly.

CRS-14
Table 4. Projected Shortages of RNs, Selected Years
Shortage
Supply (in full-
Demand (in full-
Year
time equivalents)
time equivalents)
Numbera
Percentb
2000
1,889,243
1,999,950
-110,707
-5.5
2001
1,912,667
2,030,971
-118,304
-5.8
2002
1,937,336
2,062,556
-125,220
-6.1
2003
1,959,192
2,095,514
-136,322
-6.5
2004
1,989,329
2,128,142
-138,813
-6.5
2005
2,012,444
2,161,831
-149,387
-6.9
2006
2,028,548
2,196,904
-168,356
-7.7
2007
2,039,772
2,232,516
-192,744
-8.6
2008
2,047,729
2,270,890
-223,161
-9.8
2009
2,059,099
2,307,236
-248,137
-10.7
2010
2,069,369
2,344,584
-275,215
-11.7
2011
2,075,891
2,379,719
-303,828
-12.8
2012
2,075,218
2,426,741
-351,523
-14.5
2013
2,068,256
2,472,072
-403,816
-16.3
2014
2,061,348
2,516,827
-455,479
-18.1
2015
2,055,491
2,562,554
-507,063
-19.8
2016
2,049,318
2,609,081
-559,763
-21.4
2017
2,041,321
2,656,886
-615,565
-23.2
2018
2,032,230
2,708,241
-676,011
-24.9
2019
2,017,100
2,758,089
-740,989
-26.9
2020
2,001,998
2,810,414
-808,416
-28.8
Source: HRSA, Projected Supply, Demand, and Shortages of Registered Nurses: 2000-2020.
a The number by which demand exceeds supply.
b The number by which demand exceeds supply divided by demand.
The shortage is the outcome of increasing demand for RNs throughout the 20-
year projection period and decreasing supply during its latter half. The estimated
decline in RN supply distinguishes the current shortage from the tight RN labor

CRS-15
market of the late 1980s/early 1990s, which was demand-based.41 Working women
recently have had a wider range of job opportunities open to them and consequently,
have been less prone to choose a career in nursing. 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.
Conversely, women have shown an increased interest in traditionally male-dominated
occupations (e.g., doctors or dentists).42
Because the supply side of the equation appears to be largely driving the
shortage, it may not be easily or quickly undone. Employers can be expected to try
to correct the supply-demand imbalance 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
greater demands on the nation’s health care delivery system.43 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.
However, “eliminating the shortage would require immigration on an unprecedented
scale,”44 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.
State Projections
Not all states may now be experiencing a shortage of RNs, according to HRSA’s
latest projections. The following 21 areas were projected to have a sufficient supply
relative to demand in 2000:
Alabama, District of Columbia, Florida, Idaho, Illinois, Kansas, Kentucky,
Louisiana, Maryland, Michigan, Mississippi, Montana, North Carolina, North
Dakota, Oklahoma, South Carolina, South Dakota, Vermont, West Virginia,
Wisconsin, and Wyoming.
41Aiken, 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.
42Stager, 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.
43American Organization of Nurse Executives. Perspectives on the Nursing Shortage: A
Blueprint for Action. October 2000. Available at: [http://www.aone.org].
44Buerhaus, 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.

CRS-16
Thirty states likely had a shortage of FTE RNs in 2000, with shortage defined
as demand surpassing supply by at least 3% in light of “uncertainties in the
estimation process.”45 The extent of the shortfall could have varied widely — from
under 4% in Iowa (942 FTEs), Minnesota (1,347 FTEs), and Oregon (849 FTEs), to
13% or more in Arizona (5,984 FTEs), New Jersey (8,392 FTEs), and Tennessee
(6,798 FTEs).
Perhaps seven states (Alabama, Florida, Idaho, Maryland, North Dakota,
Oklahoma, and Wyoming) and the District of Columbia could be added in 2005 to
those with an RN shortage in 2000. Conversely, a few states (Hawaii, Iowa,
Minnesota, and Ohio) could move out of a shortage situation over the same 5-year
period.46
After 2005, HRSA estimates that no states are likely to move out of a shortage
situation. Instead, between 2005 and 2010, three states (Illinois, Michigan, and South
Carolina) might join those already projected to be experiencing a shortfall of RNs.
Seven states (Louisiana, Minnesota, Montana, North Carolina, South Dakota, West
Virginia, and Wisconsin) might be added in 2015. Between 2015 and 2020,
Mississippi could join the ranks of states with too few FTE RNs relative to projected
demand.
The RN shortage is estimated to be almost universal by 2020, when HRSA
projects it could affect 44 states and the District of Columbia. The severity of the
shortfall also is estimated to worsen over the 20-year projection period, ranging up
to highs of over 40% in Alaska, California, Connecticut, Delaware, Georgia, Idaho,
New Jersey, New Mexico, Oregon, Rhode Island, Tennessee, Washington, and
Wyoming by 2020.
Only Hawaii, Iowa, Kansas, Kentucky, Ohio, and Vermont might have an
adequate RN supply compared to demand in 2020, according to HRSA’s latest
projections. Three of these six states — Kansas, Kentucky, and Vermont — might
have an adequate supply of FTE RNs throughout the projection period.
45HRSA, Projected Supply, Demand, and Shortages of Registered Nurses, p. 3. Note: The
following situations affect the accuracy of state-specific projections: “(a) a State may have
many local shortages yet overall have an adequate supply; (b) a significant number of nurses
commute across State boundaries to work; (c) jurisdictions like Washington, D.C. provide
service to large populations from outside its boundaries; and (d) demand projection
methodology inadequately accounts for the differences in nursing utilization patterns that
may exist between States.”
46HRSA, Projected Supply, Demand, and Shortages of Registered Nurses.