Research / BFI Working PaperNov 19, 2020

When Nurses Travel: Labor Supply Elasticity During COVID-19 Surges

Joshua Gottlieb, Avi Zenilman, R.N.

We study how short-term labor markets responded to an extraordinary demand shock during the COVID-19 pandemic. We study traveling nurse jobs—a market hospitals use to fill temporary staffing needs—to examine workers’ willingness to move to places with larger demand shocks. We find a dramatic increase in market size during the pandemic, especially for those specialties central to COVID-19 care. The number of jobs increased far more than compensation, suggesting that nurses’ willingness to travel is very responsive to compensation. To examine workers’ willingness to move across different locations, we examine jobs in different locations on the same day, and find even more responsive labor supply. We show that part of this supply responsive-ness comes from workers’ willingness to travel longer distances for jobs when payment increases, suggesting that an integrated national market facilitates reallocating workers when demand surges. This implies that a simultaneous national demand spike might be harder for the market to accommodate rapidly.

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