Determinants of Employment Growth in the Healthcare Sector

Colvin, Trevor

Determinants of Employment Growth in the Healthcare Sector

Persistent URL

http://hdl.handle.net/10456/35922

Author(s)

Colvin, Trevor

Date Issued

May 2, 2014

Abstract

Healthcare is among the largest components of personal consumption and government expenditure in the United States today. This indicates that the demand for healthcare has increased greatly over the years. As a result, healthcare firms need to hire qualified employees to keep up with demand. This study examines the determinants of employment growth in the healthcare sector. Attention is given as to how healthcare employment growth has evolved over time in relation to business cycle phases, as defined by the National Bureau of Economic Research (NBER). This study also highlights various aspects of the healthcare system by investigating previous researchers’ works. The economic theory of cost minimization subject to producing a desired level of output is thoroughly discussed, since healthcare firms are constantly trying to cut costs while providing excellent care. A multiple regression analysis on the effects that various independent variables, derived from theory, have on healthcare employment growth is also conducted in this study. Findings include that 1) a major structural change occurred in 1990, which is explained by the growth rate of employment in the healthcare sector, 2) employment in the healthcare sector is likely to continue to grow, but not at the rates seen from 1968 to 1990, and 3) contractions have a negative impact on healthcare employment; however, this effect is not as recognizable in comparison to other recession prone sectors.

Honors

Economics, 2014

First Reader(s)

Casler, Stephen