Team Composition and the Returns to Human Capital: Evidence from Nursing Teams

This paper examines the role of team production in healthcare, a sector where collaboration, communication and knowledge sharing are crucial. Employing novel high-frequency data we examine the impact of the size and human capital of hospital nursing teams on inpatient mortality. We find significant adverse mortality impacts of shortages of nurses with higher levels of general and firm-specific human capital but no clear returns to locationor team-specific experience. Adverse impacts of nurse shortages are particularly concentrated among patients with sepsis, a condition where early detection is key and nurses play a direct role in monitoring and assessing patients. JEL classification: I11, J24, J45, M50. The research was enabled by the Imperial Clinical Analytics Research and Evaluation (iCARE) environment and used the iCARE team and data resources. Data management was provided by the Big Data and Analytical Unit (BDAU) at the Institute of Global Health Innovation (IGHI). This paper has been screened to ensure no confidential information is revealed. All authors gratefully acknowledge financial support from the UK Economic and Social Research Council (ESRC) through the Centre for the Microeconomic Analysis of Public Policy (CPP) at the Institute for Fiscal Studies (ES/M010147/1) and “The impact of medical labour on variation in patient outcomes: evidence from English public hospitals” research grant (ES/S003118/1). Propper also acknowledges funding from ERC Advanced Investigator Grant Healthcare Labour. We would like to thank Eric French, Imran Rasul and seminar participants at the Institute for Fiscal Studies, University of York, Monash University, University of Sydney, Essen Health Conference 2022, European Association of Labour Economists 2022 Conference, European Health Economics Association 2022 Conference, the Royal Economic Society conference 2022, and the Allied Social Science Associations 2023 meeting for their helpful comments. Any errors are the authors’ own. Author affiliations and contacts: Kelly (Health Foundation and Institute for Fiscal Studies, elaine.kelly@health.org.uk); Propper (Imperial College Business School, Monash University and Institute for Fiscal Studies, c.propper@imperial.ac.uk, corresponding author); Zaranko (Institute for Fiscal Studies, ben.zaranko@ifs.org.uk).