Labor wedge watch

People are having a hard time getting into nursing school.

“So many people want to be a nurse now that there’s just not enough room in the classroom and the hospitals to accommodate all those people,” said Bradford.

Her theory is more than personal opinion. Recent data indicates that nursing classrooms are filling up faster, and the fight to get in is tougher than ever.

In the Sacramento region, at least three colleges — American River, Chico State and Yuba — report significant jumps in nursing school applications since 2004.

“We’re hearing of people waiting two years before they get to the top of a (nursing school) waiting list,” said Spetz.

Why not open more schools, hire more teachers, etc. The article says because teachers don’t get paid enough and schools don’t have enough money. Something fishy is going on when demand for a good rises but prices and/or quantities don’t.

10 thoughts on “Labor wedge watch”

  1. Must be some kind of “adjustment cost”. Just ad-hoc add a quadratic term in the cost function, and we’re can pack up and go home. Life is easy in RBC land.

  2. Maybe it’s one of those credentialing things that limit supply to raise wages, like med school, law school, econ phds, etc.

  3. Could be a logistical component too. Specialty programs take specialty facilities (math just takes chalkboards and trash cans, philosophy just takes chalkboards, etc.) Four years doesn’t seem like enough time to notice a jump in applications, secure an expanded budget, acquire facilities, and recruit staff. Even a private school has to build up some momentum before it can scale a department like that.

    The state schools had a hiring freeze through ’05 at least, if I’m not mistaken.

  4. PS – Anyone in the education industry not able to anticipate an increase in the demand for health related education is really, really bad at their job.

  5. How about anyone in the economics industry not able to anticipate a decrease in the demand for almost everything? Almost the entire profession was caught flatfooted. I’m just saying, people in glass houses, you know…..

  6. Off topic alert: these guys have been reading my mind.

    “In our hour of greatest need, societies around the world are left to grope in the dark without a theory. That, to us, is a systemic failure of the economics profession.”


    “It is pretty obvious how the currently popular class of dynamic general equilibrum models would have to ‘cope’ with the current financial crisis. It will be covered either by a dummy or it will have to be interpreted as a very large negative stochastic shock to the economy, i.e. as an event equivalent to a large asteroid strike.”

  7. That paper makes a number of incorrect statements about model assumptions. The paper’s greatest sin, though, is that it points out theoretical shortcomings (of which nobody disagrees) without providing an alternative framework. To the extent they do provide other ways of analysis, great. Bring those ideas to the data. If they explain more than the models they don’t like, then they’ll win. On the other hand, if their models ONLY explain THIS recession then its not clear they’re adding much to the science. There are lots of models (like an infinity) that can explain one data point.

    That second quote you list is just wrong, btw. You can imagine contagion-like propagation mechanisms added to dsge models were a small shock has big effects. Some might call these “financial accelerator” effects.

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