AIDS AND THE MARKET FOR NURSES

This paper analyzes the market for registered nurses in the U.S. during the period from 1978 to 1995, but is specifically concerned with how the prospect of treating patients with HIV or AIDS may have affected the supply of entrants into nursing. Using cross-sectional time-series data, we find that concern about the risk of contracting AIDS reduced admissions to nursing schools by as much as 15%. In states with a higher incidence of AIDS, such as New York, we find a much larger effect. Since the deterrent effect of AIDS was not limited to those considering whether to enter nursing school, our estimates represent a lower bound on the reduction in supply. However, we also find that the deterrent effect declined over time, as it became clear that the disease could not be transmitted by casual contact.

Our findings suggest that substantial welfare costs are imposed by regulations that require all nurses to treat patients with HIV or AIDS.