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This study examines the extent to which nursing homes adjust staffing and care practices relative to local market conditions. Weighted two-stage least squares regression results suggest that facilities employ more nonprofessional nursing staff in markets in which professional nurse wages are higher. RN staffing levels are higher in markets with a higher percentage of self-pay nursing home residents and a lower percentage of for-profit nursing homes. Controlling for resident characteristics, the use of labor-saving practices is higher in markets with higher average nursing home wages, suggesting that there are economic incentives to hire fewer nursing personnel.
J. S. Zinn (Wed,) studied this question.