Government subsidy of critical-need occupations: the case of nurses.

This paper undertakes an econometric evaluation of governmental policies aimed at increasing the labor force supply of nurses and at effecting greater hospital substitution among auxilliary health personnel, in times of nurse shortage. The methodology is to employ a simultaneous equation, multi-nurse econometric model which is estimated by a three-stage least-squares procedure incorporating use of logit transformation to deal with limited dependent variables and use of weighted least squares to deal with heteroskedasticity.