National Center for Health Workforce Analysis

Supply, Demand, and Use of Licensed Practical Nurses

November 1, 2004

Prepared for the Department of Health and Human Services, Health Resources and Services Administration, Bureau of Health Professions, Office of Workforce Evaluation and Quality Assurance by the Center for Health Workforce Distribution Studies, University of California, San Francisco under Grant # 1-U79-HP-00032-01

Prepared by: Jean Ann Seago, PhD, RN; Joanne Spetz, PhD; Susan Chapman, PhD, RN; Wendy Dyer, MS; Kevin Grumbach, MD; Center for California Health Workforce Studies, University of California, San Francisco

Table of Contents (for on-line viewing) Entire report in Adobe/pdf

Executive Summary
Chapter 1:  Introduction
Chapter 2:  The LPN Workforce
Chapter 3:  Scope of Practice and Practice Acts
Chapter 4:  Education of LPNs
Chapter 5:  Factors Affecting the Supply and Demand for LPNs
Chapter 6:  Perspectives of the Employers, Educators, State Boards, and Nurses
Chapter 7:  Summary, Conclusions, and Recommendations        
Appendices
Appendix A
Appendix B
Appendix C
Appendix D
Appendix E
Appendix F

Executive Summary

Although licensed practical nurses (LPNs) organized into professional groups as early as 1941, there is little in the literature about the practice, work, demand for, or efficient utilization of the licensed practical nurse. There also is little guidance about how to make effective use of these practitioners' skills to enhance patient care and augment the nurse workforce.  Recently there has been an increased interest in trying new care delivery models in acute care hospitals using LPNs (Kenney, 2001) .  In the 1990s, publications explored the creative use of LPNs in critical care, as advice nurses, and in intravenous therapy teams (Buccini, 1994;Ingersoll, 1995; Intravenous Nurses Society, 1997 ;Eriksen, 1992;Roth, 1993).  However, little systematic study has occurred to explore these roles. 

This study examines the demand, supply, utilization, and scope of practice of LPNs in the United States.  Particular attention is paid to educational issues, career mobility, geographic distribution, and the ability of LPNs to substitute for registered nurses.  The research team analyzed data from the Bureau of the Census, American Hospital Association, National Council of State Boards of Nursing, and Centers for Medicare and Medicaid Services to learn about LPN characteristics, education, and employment.  Scope of practice information was obtained and characterized to learn how practice regulations vary nationally and how they affect the demand for LPNs.  Key informant interviews and focus groups were conducted in four States: California, Iowa, Louisiana, and Massachusetts.  The findings of the study are provided in this report.  

Data from the Bureau of Labor Statistics’s Current Population Survey to describe the demographic characteristics of LPNs, was compared to registered nurses (RNs) from 1984 to 2001.  The data indicate the following similarities and differences between LPNs and RNs.

Similarities:

• Both workforces are aging, with LPNs being slightly older than RNs on average;
• Males represent a small percent of both workforces, but are slowly increasing;
• The western region of the U.S. has the lowest numbers of LPNs and RNs relative to the population;
• On average, RNs and LPNs work between 36 and 38 hours per week;
• The shares of RNs and LPNs working in offices and clinics of physicians doubled between 1984 and 2001; and
• The hourly pay rate of RNs and LPNs increased 19 percent between 1984 and 2001.

Differences:

• The RN workforce is larger than the LPN workforce, but the actual size of the LPN workforce is unclear because the available data are conflicting;
• Compared to RNs, more LPNs live in the South and fewer in the Northeast;
• Fewer LPNs are foreign-born, whereas an increasing percent of RNs are immigrants;
• RNs work in hospitals in greater proportions than LPNs, and the share of LPNs working in hospitals declined more than RNs between 1984 and 2001;
• The percent of LPNs working in nursing and personal care facilities increased between 1984 and 2001, but the percent of RNs did not; and
• By 2001, the percentage of LPNs working in the private sector was greater than the percent of RNs working in the private sector.

State boards of nursing regulate the practice of LPNs.  Most States have a single board that oversees RNs and LPNs.  Some States have separate boards for RNs and LPNs.  The boards are responsible for developing scope of practice regulations and issuing licenses.  They also have disciplinary responsibility and can revoke licenses.  There are similarities in the nursing practice acts across States, but variation in how the States express the details of the work of practical nurses.  Most States have relatively flexible practice requirements and not very specific about the tasks that are permitted. However, some States have very restrictive practice regulations and/or specific detailing of tasks that can and cannot be done by practical nurses.  These data are used in Chapter 5 to examine whether the restrictiveness and specificity of the scope of practice affect demand for LPNs.  These data suggest that it may be possible to identify States that could reasonably increase their utilization of practical nurses, particularly in hospitals, by reducing the restrictiveness of their practice.

Since the 1990s, the number of LPN education programs has remained relatively stable but there has been a decline in the number of enrolled students and graduates.  Despite the drop in graduates, the total number of active licenses increased slightly through the 1990s.  This suggests that LPNs are remaining in the workforce at higher rates than in previous years.  The number of first time US-educated graduates who are taking the LPN licensing examination has dropped, but the percentage of those passing the examination has remained relatively constant.

LPN educational requirements vary among the States and territories.  Most States specify the content and number of hours of training, and some are more detailed than others.  Most curricula teach similar basic nursing skills, such as measuring vital signs, patient data collection, patient care and comfort measures, and oral medication administration.   Most States have additional training requirements for more advanced skills, such as phlebotomy, IV infusion, and IV medication administration.  Even though requirements vary across States, States generally license LPNs that have been licensed in other States without further requirement.

Key informant interviews with leaders of State boards of nursing, LPN education programs, hospitals, and nursing homes allowed us to compare the actual practice of LPNs with the written regulations. State nursing board leaders are aware of the differences in scope of practice regulations across States, and do not find these differences troublesome.  They also recognize that employers establish their own internal practice guidelines, which may be more restrictive than the legal scope of practice.  Some hospital and education leaders think their States’ scopes of practice are too restrictive.  Nursing home leaders agreed that LPNs are essential to the provision of care in their facilities; the scope of practice of LPNs is perfectly suited to the needs of their patients.  Hospital leaders varied in their willingness to employ LPNs.  Most recognized that experienced, intelligent LPNs could be an asset to a nursing care team, but found that the scope of practice of LPNs was too limited to allow for significant employment of LPNs in acute care settings.  

Participants in the focus groups discussed their perceptions of their scope of practice, which occasionally differed from State regulations.  Most of the LPNs Stated an intention to return to school to become RNs, but few were enrolled in RN programs.  Barriers such as time, the need to keep working, challenges in getting into courses, and family issues were among those that kept LPNs from pursuing further education.  Most LPNs and RNs felt they have good working relationships with each other.   Some LPNs expressed resentment about the higher wages paid to RNs for what is seen by the LPNs as similar work.  Other LPNs said they did not envy RNs, because RNs have a greater amount of paperwork to complete and thus have less time to be with patients.  Some RNs expressed discontent about the need to supervise LPNs because supervision adds to their workload.

Based on findings in this report, we make the following recommendations:

1. The LPN could be used to augment the workforce during RN shortages.  However, the role of LPNs is limited by their scope of practice.  How much the LPN can be used depends on the ability of States to create a more flexible LPN scope of practice. States should assess whether there is evidence that lessening practice restrictions would negatively impact patient care before making changes to the scope of practice.  Careful study of the use of the LPN in various settings is necessary to determine positive or negative impact on patient outcomes.  Federal and State governments should support research on the effect of LPNs on quality of care.
2. Employers should work to create teams, of RNs and LPNs to share workload appropriately in both acute and long-term care.
3. Boards of Nursing must ensure that bedside RNs and LPNs, nurse managers, and hospital and long term care executives have a common and accurate understanding of the scopes of practice of RNs and LPNs. Employers should clarify for their employees the differences between State scopes of practice and individual institutional policy.  
4. State Boards of Nursing should work toward standardization of LPN training, both at the basic education preparation level and beyond. One mechanism to achieve greater uniformity might involve the identification of national standards for entry level and advanced education of LPNs.
5. Nurse educators need to facilitate articulation between LPN and RN license requirements. More efficient “laddering” of workers from lower skill to higher skill healthcare jobs benefits both workers and employees, and will ultimately decrease the total cost to educate nurses.
6. Based on data related to gender, age, marital status, and ethnicity, it appears that LPNs and RNs come from essentially the same pool or potential workers.  Therefore, the long-term RN shortage is unlikely be solved with an influx of LPNs, because increased recruitment of students into LPN programs will likely offset recruitment into RN programs.
7. Employers should examine how the work of licensed nurses could be allocated safely and reasonably, so that RNs are not overwhelmed and LPNs can practice to their full scope of practice.  Although LPNs cannot directly substitute for RNs, many tasks traditionally completed by RNs can be accomplished by LPNs, with appropriate training. 
8. Employers should consider providing additional compensation to LPNs who complete additional training and obtain certifications beyond the basic LPN license, to provide LPNs with incentives to continue their education. 
9. The Bureau of Health Professions and State Board of Nursing should strive to educate the public about the LPN profession, both to give recognition to practicing LPNs and to encourage more people to pursue a career in practical nursing.
10. The Bureau of the Health Professions, National Council of State Boards of Nursing, or individual State Boards of Nursing should create a national database to track both LPNs and RNs to have accurate data for prediction of nurse and healthcare workforce needs.

References

Buccini, R., & Ridings, L. E. (1994). Using licensed vocational nurses to provide telephone patient instructions in a health maintenance organization. Journal of Nursing Administration, 24(1), 27-33.

Eriksen, L. R., Quandt, B., Teinert, D., Look, D. S., Loosle, R., Mackey, G., et al. (1992). A registered nurse-licensed vocational nurse partnership model for critical care nursing. Journal of Nursing Administration, 22(12), 28-38.

Ingersoll, G. L. (1995). Licensed practical nurses in critical care areas: intensive care unit nurses' perceptions about the role. Heart and Lung: Journal of Critical Care, 24(1), 83-88.

Intravenous Nurses Society. (1997). The role of the licensed practical nurse and the licensed vocational nurse in the clinical practice of intravenous nursing. J Intraven Nurs, 20(2), 75-76.

Kenney, P. A. (2001). Maintaining quality care during a nursing shortage using licensed practical nurses in acute care. Journal of Nursing Care Quality, 15(4), 60-68.

Roth, D. (1993). Integrating the licensed practical nurse and the licensed vocational nurse into the specialty of intravenous nursing. Journal of Intravenous Nursing, 16(3), 156-166.

Chapter 1:  Introduction

Background and Significance

Licensed practical nurses (LPNs), called Licensed Vocational Nurses (LPNs) in Texas and California (Seago & Ash, 2002) , have been working with physicians and registered nurses in many settings for years.  Some women who cared for others but had no formal education frequently called themselves “practical nurses” (White & Duncan, 2001) .  However there were early schools of practical nursing including the Ballard School in New York City founded in 1892, the Thompson Practical Nursing School in Vermont in 1907, and the Household Nursing School in Boston in 1918 (White & Duncan, 2001) . These schools followed the opening of three of the first schools of “trained” nursing in the United States. These “trained” nursing schools were Bellevue Hospital in New York City, Massachusetts General Hospital in Boston, and New Haven Hospital in Connecticut, and they opened around 1873.  LPNs organized into professional groups as early as 1941 with the creation of the National Association for Practical Nurse Education & Service, Inc. (NAPNES) and the National Federation of Licensed Practical Nurses in 1949 (NFLPN) (National Association for Practical Nurses Education & Service, 2004) .

In a conversation in March of 2004 with Helen Larsen, the Executive Director for the National Association for Practical Nurse Education and Service, Larsen spoke about the State-by--State evolution of giving waivers to and licensing practical nurses.

In 1946 NAPNES recommended that States become active in seeking licensure for "Practical Nurses" and State-by-State it happened.  The "Practicals" were licensed through waivers and different States had different ways.  Some required a letter of recommendation from a physician, a supervisor, etc., and the nurse had to have worked as a practical nurse for at least 5 years immediately prior to application.  But State-by-State, they were waivered into nursing. Their licenses had a "W" on it and for many of them it was a stigma until they actually took the licensure exam.

It is difficult to categorize the work of LPNs in the U.S. because there is substantial variation in the practice acts and scopes of practice in the various States. Although the National Nursing Council recommended mandatory licensure for LPNs in 1948, not all States acted on the recommendation (Brown, 1948) . For example, Ohio did not require mandatory licensure until 1965 (Licensed Practical nurse Association of Ohio, 2002) .  Some States had a “grandfather clause” to allow licensure of persons who were practicing as practical nurses at the time the licenses were mandated. This is commonly done when new regulations are implemented.

During cycles of nurse shortage in the U.S., there typically is a renewed interest in the licensed practical nurse as a potential worker to augment the nurse workforce and as a potential substitute for registered nurses.  In response to a nursing shortage, California Senate Bill 1625 was introduced in 1951, leading to approval of California’s first LPN education program at Chaffey College.  The notion of LPNs supplementing or substituting for RNs has been discussed in nursing literature during most of the shortage cycles (Bray, 1979; Kenney, 2001) In general, the scope of practice of LPNs is more limited than that of RNs.  In some settings LPNs can serve as substitutes for registered nurses (RNs), but in other settings the scope of practice of LPNs is more restricted.   These restrictions may be because of State regulations, Federal regulations, or institutional policy.  LPNs can perform many of the functions that RNs perform but at times are not allowed to practice to the full legal limit of practice acts.

One of the broadest descriptions of LPN scope of practice comes from the U.S. Department of Labor Occupational Outlook Handbook: “Licensed practical nurses… care for the sick, injured, convalescent, and disabled under the direction of physicians and registered nurses" (US Department of Labor, 2002) .  State regulations tend to be more specific about the role of LPNs; for example, the California Board of Vocational Nursing and Psychiatric Technicians (BVNPT) States that the duties “include, but are not limited to, provision of basic hygienic and nursing care; measurement of vital signs; basic client assessment; documentation; performance of prescribed medical treatments; administration of prescribed medications; and, performance of non-medicated intravenous therapy and blood withdrawal (requires separate Board certification.)” (California Board of Licensed Vocational Nursing and Psychiatric Technicians, 2004)

In 1998, LPNs accounted for 39 percent of licensed nurses in hospitals and 46 percent of licensed nurses in long-term care settings (Bureau of Labor Statistics, 2000) . Through the 1990s growth in demand for licensed nurses was fairly consistent (Buerhaus, 1996;Spetz, 1996) with that demand being lower in areas heavily penetrated by health maintenance organizations. Additionally, during the 1990s employment of LPNs shifted away from the acute care setting toward long term care (Buerhaus, 1996).  This shift was likely related to cost cutting measures in hospitals.  The movement of LPNs out of hospitals created a gap in the acute care experience of LPNs, requiring substantial re-training and orientation of vocational/practical nurses who are brought back into the acute care setting (Barber, Bland, Langdon, & Michael, 2000) .

Reported annual turnover rates for LPNs in nursing homes range from 32 percent to 61 percent and demand for LPNs is growing each year (Decker, Dollard, & Kraditor, 2001) .  Poor wages, mandatory overtime, and physically demanding work are thought to contribute to higher turnover rates (Decker et al., 2001) .  A number of bills have been introduced in State legislatures and Congress that seek to improve the work environment for LPNs and RNs.  Eliminating mandatory overtime, providing more resources for nurse training, increasing payment rates, offering whistleblower protection, and developing needlestick prevention programs are among issues being considered through legislation (AFT Healthcare, 2002; Bellandi, 2001; Galloro, 2001) .  Some States and the Federal government are considering minimum licensed nurse-to-patient ratio regulations for acute-care hospitals, although California is the only State to have instituted such requirements.  The only national staffing requirements for long term care settings are minimal standards set by the Centers for Medicare and Medicaid Services (CMS) (formerly Health Care Financing Agency (HCFA)) (Center for Medicare and Medicaid Services, 2002) .

A number of studies have demonstrated that increased nursing hours are related to better patient outcomes (Aiken, 2000;American Nurses Association, 2000;Needleman, 2002) and organizations have called for increasing nursing hours in hospitals and long-term care settings (Spetz, 1998;AFSCME, 2002). There also is some evidence to indicate that improved patient outcomes may be related to higher education levels of RNs (Aiken, 2003).  The literature generally focuses on the importance of RN staffing in improving quality of care, and the evidence is difficult to apply to the LPN workforce.  The education and training of LPNs vary widely across States.  LPNs can apply to take a licensing examination after completing a 1 or 2 year program at a community college, an adult educational program, or private vocational school.  RNs typically are viewed as workers who have a great deal of skill flexibility, while LPNs have a more limited degree of flexibility.  During periods of nursing shortage, there is interest in creating a more efficient educational path for LPNs to become RNs. Many schools and colleges across the U.S. provide career mobility mechanisms to allow LPNs to make this transition (Eastern Tennessee State University, 2002) .  However, these programs are specific to States, geographic regions, or even schools, and popularity of programs waxes and wanes depending on the nursing labor market and economic climate.  A number of barriers, including access to courses, funding, and variation in requirements, prevent LPNs from progressing efficiently through the career ladder and little systematic study has been done to identify and reduce those barriers.

Although LPNs organized into professional groups in the early 1940s, there is little literature about the practice, work, demand or efficient utilization of the licensed practical nurse. Additionally, there is little guidance as to how to most effectively make use of this practitioners' skills to enhance patient care and augment the nurse workforce.  In the 1990s, there were published works that explored the creative use of LPNs in critical care, as advice nurses, and in intravenous therapy teams, (Buccini,1994; Ingersoll,1995; Eriksen,1992; Roth,1993); interest in trying new care delivery models using LPNs in acute care hospitals has been renewed in the 2000s (Kenney, 2001) .  However, little systematic study has occurred that explore these staffing strategies.  It is important to measure the effects of these roles and how they work with the scope of practice of the LPN.  This study will fill some of the gaps in our understanding of the LPN workforce in the United States.

Purpose and Organization of This Report

The objective of this study is to inform nurse educators, employers, the health professions community, the public, and policy makers about the demand, supply, utilization, and scope of practice of LPNs in the 50 United States, the 4 U.S. territories, the District of Columbia, and the Commonwealth of the Northern Marianas Islands.  Particular attention is paid to educational issues, career mobility, geographic distribution, and the ability of LPNs to substitute for registered nurses.  Since most boards refer to this provider as a licensed practical nurse, we will use the title LPN and not LVN.  The terms “licensed nurse” and “nurse” are used to refer to the combined group of RNs and LPNs

This research will seek to answer these questions:

1. What is it that LPNs do and in what settings are they employed? (Chapters 2 & 3)
2. What is the demographic profile of the LPN workforce?  (Chapter 2)
3. What are national and State educational trends in applications, enrollments, and graduates? (Chapter 4)
4. What are the supply, demand, and adequacy of the LPN workforce? (Chapter 5)
5. To what degree can LPNs substitute for RNs? (Chapter 3)
6. Is there any evidence of increasing demand for LPNs as a result of the RN shortage? (Chapter 6)
7. What are the issues precluding greater utilization of LPNs as a way of mitigating the current RN shortage? (Chapter 3)
8. What are employer, educator, and practicing LPN perspectives on the current State of the LPN workforce and its ability to substitute for registered nurses? (Chapter 6)

This report is organized into seven chapters, each addressing specific research questions.  Each chapter includes an overview of the questions addressed, the significance of the questions, the design and methods used, specific findings, and a discussion of the meaning of the findings.  Chapter 2 provides a general description of the LPN workforce.  Using secondary data, we describe the demographic and employment characteristics of the LPN workforce.  Chapter 3 provides a discussion and analysis of data on LPN scope of practice and recent legislation related to the work of LPNs. Data on the scope of practice of LPNs were collected from all 50 States.  Information was gathered from officials in State licensing boards and government Internet sites. Recent legislation regarding the practice of LPNs was identified with assistance from the National Conference of State Legislatures and other sources.  The legislative activity is evaluated to assess how the use of LPNs has changed or might change in the near future.

Chapter 4 provides a description and analysis of LPN education using both primary data collection and secondary data analysis. Chapter 5 examines the supply and demand of LPNs.  The supply of RNs is known to vary with personal characteristics and economic conditions (Link, 1985;Buerhaus, 1994;Brewer, 1994).  We estimate a multivariate regression equation to identify the relative importance of factors that affect the supply of LPNs.  How does the labor force participation of LPNs change as LPNs age?  How responsive is the LPN workforce to changes in wages or economic conditions?  Has the underlying supply of LPNs changed over time?  Then, we estimate multivariate regression equations for the demand for LPNs by hospitals and nursing homes, using national data.  These models enable us to determine the relative importance of quantity of care provided by facilities, wages of all personnel, scope of practice regulations, Medicare and Medicaid reimbursement rates, managed care penetration, and other factors on the demand for licensed vocational nurses.  The analysis takes into account the fact that demand for LPNs may affect the wages of LPNs and other personnel, and that scope of practice may be affected by demand for LPNs using instrumental variables techniques (Newhouse & McClellan, 1998) .

Chapter 6 considers the perspectives of employers, educators, and practicing LPNs regarding the practice and education of LPNs.  We selected 4 States in which to conduct in-depth qualitative research, including focus groups and interviews with LPN employers, educators, and Boards.  From this research, we gain more depth in our understanding of how LPNs practice in the United States, and what the future may hold for these professionals. Finally, Chapter 7 summarizes our findings, conclusions, and recommendations. 

References

AFSCME. (2002). Legislative Fact Sheet, from http://www.afscme.org/action/legfs01.hrm

AFT Healthcare. (2002). Legislative Update, from http://www.aft.org/healthcare/legislative/index.html

Aiken, L. H., & Patrician, P. A. (2000). Measuring organizational traits of hospitals: the Revised Nursing Work Index. Nursing Research, 49(3), 146-153.

Aiken, L. H., Clarke, S. P., Cheung, R. B., Sloane, D. M., & Silber, J. H. (2003). Educational levels of hospital nurses and surgical patient mortality. Journal of the American Medical Association, 290(12), 1617-1623.

American Nurses Association. (2000). Nurse Staffing and Patient Outcomes in the Inpatient Hospital Setting. Washington, DC: American Nurses Publishing.

Barber, J. L., Bland, C., Langdon, M. B., & Michael, S. (2000). LPN role advancement: from blueprints to ribbon cutting. Journal of Nurses in Staff Development, 16(3), 112-117.

Bellandi, D. (2001). High court to hear labor case: Kentucky suit questions right of some nurses to be union members. Modern Healthcare, 31(8), 26-27.

Bray, P. (1979). The LP/VN supplements the hospital staff. The Journal of Nursing Care, 26-27.

Brewer, C. S. (1994). The short-run labor supply of registered nurses: a comparison of male and female registered nurses in 1984 and 1988 [abstract]. AHSR FHSR Annu Meet Abstr Book, 11, 127.

Brown, E. (1948). Nursing for the Future. New York: Russell Sage Foundation.

Buccini, R., & Ridings, L. E. (1994). Using licensed vocational nurses to provide telephone patient instructions in a health maintenance organization. Journal of Nursing Administration, 24(1), 27-33.

Buerhaus, P. I. (1994). Managed competition and critical issues facing nurses. Nurs Health Care, 15(1), 22-26.

Buerhaus, P. I., & Staiger, D. O. (1996). Managed care and the nurse workforce. Journal of the American Medical Association, 276(18), 1487-1493.

Bureau of Labor Statistics. (2000). Categories of Occupations Employed in Selected Long-Term Care Settings and in Hospitals, United States, 1998.

California Board of Licensed Vocational Nurses and Psychiatric Technicians. (2004, 1951). Licensed Vocational Nurses. Paper presented at the Sections 2512 (Vocational Nurses) of the California Code of Regulations.

Center for Medicare and Medicaid Services. (2002). Form CMS-671.

Decker, F. H., Dollard, K. J., & Kraditor, K. R. (2001). Staffing of nursing services in nursing homes:  Present issues and prospects for the future. Seniors Housing & Care Journal, 9(1), 3-26.

Eastern Tennessee State University. (2002). N.U.R.S.E. Center LPN to BSN Career Mobility Project, from http://www.etsu.edu/etsucon/lpn-bsn_career_mobility_project.htm

Eriksen, L. R., Quandt, B., Teinert, D., Look, D. S., Loosle, R., Mackey, G., et al. (1992). A registered nurse-licensed vocational nurse partnership model for critical care nursing. Journal of Nursing Administration, 22(12), 28-38.

Galloro, V. (2001). Who's minding the store?; Survey finds need for more than 100,000 nursing home workers, from http://Web lexis-nexis.com/universe/printdoc

Ingersoll, G. L. (1995). Licensed practical nurses in critical care areas: intensive care unit nurses' perceptions about the role. Heart and Lung: Journal of Critical Care, 24(1), 83-88.

Kenney, P. A. (2001). Maintaining quality care during a nursing shortage using licensed practical nurses in acute care. Journal of Nursing Care Quality, 15(4), 60-68.

Licensed Practical nurse Association of Ohio, I. (2002). LPNAO Overview-History, from http://www.lpnao.org/history.html

Link, C. R. (1985). Labor supply responses of licensed practical nurses: A partial solution to a nurse shortage? Journal of Economic Business, 37(1), 49-57.

National Association for Practical Nurses Education & Service, I. (2004). Home page, 2004, from http://napnes.org/

Needleman, J., Buerhaus, P., Mattke, S., Stewart, M., & Zelevinsky, K. (2002). Nurse-staffing levels and the quality of care in hospitals. N Engl J Med, 346(22), 1715-1722.

Newhouse, J., & McClellan, M. (1998). Econometrics in outcomes research:  The use of instrumental variables. Annual Review of Public Health, 19, 17-34.

Roth, D. (1993). Integrating the licensed practical nurse and the licensed vocational nurse into the specialty of intravenous nursing. Journal of Intravenous Nursing, 16(3), 156-166.

Seago, J. A., & Ash, M. (2002). Registered nurse unions and patient outcomes. Journal of Nursing Administration, 32(3), 143-151.

Spetz, J. (1996). Wages and employment of nurses: an analysis of demand and implications for policy.

Spetz, J. (1998). Hospital employment of nursing personnel. Has there really been a decline? Journal of Nursing Administration, 28(3), 20-27.

White, L. e., & Duncan, G. (2001). Basic Nursing:  Foundations of Skills and Concepts: Delmar Learning.

U.S. Department of Labor. (2002). Licensed Practical and Licensed Vocational Nurses, from http://www.bls.gov/oco/ocos102.htm#nature

Chapter 2:  The LPN workforce

Relatively little is known about the LPN workforce in the United States.  As far as we have been able to determine, there has only been one national survey of LPNs, conducted in 1983 (U.S. Department of Health and Human Services, 1985). We have not been able to locate a single database providing information about the number of licensed practical nurses in the Nation.  Information about the size, demographics, and employment characteristics of this workforce must be obtained from a variety of disparate sources.  Since none of these sources of data can provide comprehensive information, some of the data are conflicting when compared across sources.

Workforce Size and Distribution

According to estimates from the Census 2000 Special Equal Employment Opportunity Tabulation (U.S. Bureau of the Census, 2000), there were 596,355 licensed practical nurses in 2000.  This figure, however, is lower than the total number of active LPN licenses and number of jobs held by LPNs.  The following table compares figures from various sources.

Table 2.1:  Licensed Practical Nurses in the United States

In Table 2.2 we compare two different measures of LPN supply by State.  In every State except Maryland, the number of active licenses is much larger than the LPN population estimate.  In Maryland the estimated population exceeded the total number of active licenses by 909.  The population estimates as a percent of the total number of active licenses range from 35 percent to 111 percent.  Since a person can have an LPN license in more than one State, using the number of active licenses as a measure of supply most likely overstates the number of LPNs in each State. 

Table 2.2:  Total Active LPN Licenses and Estimated LPN population

*Estimates may not add to total due to rounding

Sources: (1) (Crawford, 2001) (2) (U.S. Bureau of the Census, 2000)

Table 2.3 shows the estimated number of LPNs and RNs per 100,000 population, and ranks States based on these ratios.  There are about four times as many RNs as there are LPNs per 100,000 people in the U.S. population.  Massachusetts and New Hampshire stand out as having the greatest difference between the numbers of RNs and LPNs, having over 1000 RNs and under 200 LPNs per 100,000 population.  Overall, there is more variation in the numbers of RNs per capita than of LPNs.  Though the distribution of LPNs throughout the U.S. does not closely match the distribution of RNs, there are some similarities. 

In 2000, the estimated number of LPNs per 100,000 population ranged from a low of 88 in Oregon to a high of 365 in Arkansas.  Other States with low numbers of LPNs per 100,000 people include Alaska, Nevada, Colorado, Utah, and Hawaii.  In fact, the Western part of the U.S. appears to have the lowest concentration of LPNs, while the South and Midwest (e.g., Arkansas, Oklahoma, Louisiana, Minnesota, and North Dakota) have the highest.  This pattern is similar to that reflected in the data for RNs.  States with the lowest numbers of RNs per 100,000 individuals in the population include Nevada, California, Utah, Idaho, and Texas – mostly western States.  The highest numbers are in the Northeast and Midwest (e.g., Massachusetts, New Hampshire, Iowa, South Dakota, and Rhode Island).

Table 2.3:  LPNs and RNs Per 100,000 Population

Sources: (1) (U.S. Bureau of the Census, 2000) (2) (U.S. Bureau of the Census, 2003)

Demographics of LPNs

Information about the demographic characteristics of LPNs can be obtained from the Current Population Survey (CPS).  The CPS is a monthly survey of households conducted by the Bureau of the Census for the Bureau of Labor Statistics.   It is the primary source of information on the labor force characteristics of the U.S. civilian non-institutional population (see http://www.bls.census.gov/cps/overmain.htm) (U.S. Bureau of the Census, 2004).  The CPS contains individual and family demographic information.  LPNs are self-identified in these data by reporting that their occupation is licensed practical nursing.  We computed all data presented here using weights provided by the Bureau of the Census to ensure that the data represent the U.S. population. With relatively few LPNs in some years of this survey, the data may not represent the LPN workforce accurately.  Furthermore, the CPS was revised in 1994, resulting in the discontinuation of several variables in dataset.  Several questionnaire items were changed, making comparisons across all years difficult or impossible depending on the variable.  Thus, some of the demographic information we report is for recent survey years only. 

Table 2.4 shows the number of LPNs in the CPS from 1984 to 2001. The number of LPNs identified in the CPS has declined from 1,002 in 1984 to 584 in 2001.  This drop follows the decline in the total number of records in the CPS between 1984 and 2001.  Thus, it does not reflect a trend in the supply of LPNs; rather, it reflects the drop in the number of households surveyed by the Census. 

Table 2.4:  Number of LPNs Identified in the Current Population Survey Outgoing Rotation Group Files, 1984-2001 (Unicon Research Corporation, 2002)

The regional distribution of nurses in the 1984-2001 CPS data is shown in Figures 2.1 through 2.3.  All three types of nursing personnel—LPNs, RNs, and nurse aides—have a similar regional distribution.  The major difference is that more LPNs live in the South and fewer in the Northeast, as compared to RNs in the data.  This is in agreement with the population estimates.

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Table 2.5 presents the gender and racial/ethnic characteristics of LPNs in the United States from 1984 through 2001.  Men are a slowly growing share of the LPN workforce, comprising only 3 percent of LPNs in 1984 and 5 percent in 2001.  The share of LPNs that is male is similar to that of the RN workforce (See Spratley et al. (2000) for information on RN gender distribution).

The LPN workforce is predominantly white, although the ethnic diversity of LPNs has grown over time.  In 1984, 77 percent of the LPN workforce was white, but this share dropped to 67 percent by 2001.  The largest minority group of LPNs is blacks, comprising 26 percent of the workforce in 2001.  Blacks are overrepresented in the LPN workforce relative to the total U.S. population.  Hispanics account for 3 percent and Asians account for 2 percent of the LPN workforce; these ethnic groups are significantly underrepresented in this workforce, and these shares have not changed substantially since the 1980s.  About 1 percent of the LPN workforce is Native American; this is consistent with the general population (see Census 2000 population estimates at http://quickfacts.census.gov/qfd/States/00000.htm).

Table 2.5:  Distribution of Licensed Practical Nurses by Gender and Race/Ethnicity

Most LPNs are married (Table 2.6).  From 1984 to 2001, the share of LPNs that reported being married varies between 56 percent and 66 percent, with no clear pattern of change over time.  During this same time period, between 23 percent and 32 percent were widowed, divorced, or separated, and 10 percent to 14 percent were never married.

Table 2.6:  Marital Status of Licensed Practical Nurses

As with registered nurses, the mean age of LPNs has been increasing since the 1980s.  In 1984, the mean age was 39.  By 2001, the mean age was 43.  As shown in Table 2.7, LPNs are slightly older than RNs on average.  The age distribution of LPNs in the 1984-2001 CPS data is shown in Figure 2.4.  The histogram shows the distribution of the ages of LPNs.  The numbers on the left indicate the age range, while those on the right are the number of LPN observations.  The box plot to the right of the histogram illustrates the 75^th (age 49) and 25^th (age 32) percentiles, denoted by the top and bottom of the box, respectively.  The plus sign in the upper half of the box signifies the mean (age 41).  Both plots indicate that the LPN workforce leans toward older ages, rather than being evenly spread out across all ages.  Based on these data, we can expect large numbers of LPNs to retire within the next 25 years.

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Table 2.7:  Mean Age of Licensed Nurses

More LPNs are U.S.-born than RNs.   In 2001, 94 percent of LPNs had been born in the U.S.  This percent was the same in 1994, the earliest date for which the CPS has data on citizenship status.  However, the data shows that an increasing percent of RNs are foreign-born: 11 percent in 2001 compared to 8 percent in 1994.  The CPS also collects data on when survey respondents immigrated to the U.S.  The data shows that foreign-born LPNs mostly immigrated to the U.S. in the 1970s, 1980s, and late 1990s.

Table 2.8 shows the educational attainment of LPNs in the CPS data.  The CPS education data prior to 1992 indicate only the highest grade attended and completed.  College is defined as ranging from 13 years of education to 18 or more years of education.  Between 1984 and 1991, 47 percent to 59 percent of LPNs completed at least 1 year of college. Beginning in 1992, information on degrees attained is available.

Almost 66 percent of LPNs in 1992 completed some college or an AA degree.  This percent increased to almost 80 percent by 2001.  Between 1992 and 2001, there was a small increase in the percentage of LPNs with a bachelor’s degree.  The bachelor’s degrees may have been in non-nursing fields of study.  Since 1996, this figure has hovered near 5 percent.  Less than 1 percent holds a master’s or doctorate degree in any field of study.  Those who have only a high school education (including those who did not graduate) represent a decreasing proportion of LPNs.  In 1992, this figure was 30 percent; by 2001 it had decreased to 15 percent.

Table 2.8:  Educational Attainment of LPNs

The Current Population Survey contains family income information by income categories.  In any year, however, 4 percent to 13 percent of LPNs in the CPS data have no family income information.  From 1984 to 2001, the majority of LPNs responded that their family income was less than $50,000 per year.  Between 1984 and 1985, more than half reported family incomes less then $25,000. Since the 1980s, the proportion of LPNs with family incomes over $50,000 increased so that by 2001 one-third of LPNs were in this family income category. 

Employment status of LPNs

The Current Population Survey asks respondents whether they are employed.  However, we should note that since 1994, the CPS variable for employment status has been derived from all labor force items in the survey; this was not the case previously. Thus, it is possible that estimates from the CPS understated the percent of working survey respondents prior to 1994.  Also, it is important to keep in mind that LPNs are self-identified in the CPS data (by reporting that their occupation is licensed practical nursing).  Thus, some people might have licenses as LPNs, but do not identify themselves as such because they are working in other fields (or not working at all).

In 1984, 80 percent of LPNs said they were employed; this share rose to 94 percent by 2001 (Figure 2.5). This is very similar to RN employment trends in the data.  Relatively small shares of LPNs are unemployed at any time, with the rate always below 5 percent between 1984 and 2001. LPNs reporting that they were not part of the labor force decreased from 16 percent in 1984 to 5 percent in 2001.  It is unclear whether this is due to changes in the CPS survey in 1994, or whether there is a higher share of LPNs in the labor force in recent years.

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The CPS asks survey respondents why they are not in the labor force, but the precise questions have changed over time.  Between 1984 and 1988, 52 percent to 69 percent of LPNs not in the labor force reported housekeeping responsibilities as the main reason for not working.  Another 5 percent to 11 percent reported being in school, while 17 percent to 32 percent reported other reasons for not working, including retirement.  Comparable data for RNs not in the labor force indicate the following: 66 percent to 72 percent reported housekeeping responsibilities, 4 percent to 6 percent indicated school, and 20 percent to 26 percent claimed other/retired as the main reason for not looking for work.

In 1989, a new variable was added to the CPS that provided more detail as to why survey respondents were not looking for work.  (However, this variable was discontinued after 1993).  Between 1989 and 1992, 4 percent to 10 percent of LPNs (and 4 percent to 7 percent of RNs) not looking for work reported they were in school; this is a similar share as between 1984 and 1988.  Illness and disability were reported by 21 percent to 35 percent of LPNs, compared to 11 percent to 19 percent of RNs, not in the labor force.  In 1989, 47  percent indicated that they were “keeping house,” with this share declining to 30 percent by 1992. Likewise, compared to previous survey years, a smaller and declining share of RNs reported housekeeping responsibilities as the main reason for not seeking employment. Retirement was reported as the reason for 8 percent to 14 percent of LPNs and 15 percent to 23 percent of RNs not looking for work.

Between 1994 and 2000, 22 percent to 50 percent of LPNs who were not in the labor force said they were retired.  Not surprisingly, this share is higher than the estimated retired shares of the 1980s, since LPNs are now older on average.  The retirement figures for RNs in the 1994-2000 CPS data range from 29 percent to 41 percent, with no clear trend.  The proportion of LPNs who reported not being in the labor force due to disability varies from 9 percent to 39 percent between 1994 and 2000. This figure ranges from 5 percent to 19 percent for RNs. Again, there is no clear trend in the data for LPNs or RNs.  In almost every survey year since 1994, most LPNs and RNs who reported not being in the labor force did not provide a detailed reason for their labor force status.  By 2001 over 80 percent of LPNs not working and not seeking work provided an answer that fell into the “other” category.

Since 1994, the CPS has asked respondents if they hold more than one job.  LPNs reported having more than one job at a rate of 6 percent to 9 percent between 1994 and 2001. A somewhat larger share of RNs reports having more than one job during this same time period.  It is unclear from the data whether there is an upward trend in LPNs holding multiple jobs. 

Work settings of LPNs

LPNs work primarily in hospitals and nursing and personal care facilities (Table 2.9).  From 1984 to 2001, the proportion of LPNs working in hospitals declined from 54 percent to 32 percent.  During this same time period, the percent of LPNs working in nursing and personal care facilities grew from 26 percent to 32 percent.  The proportion of RNs working in hospitals also declined between 1984 and 2001, but by only by 10 percentage points.  However, even at its lowest, 60 percent in 2001, the share of RNs working in hospitals is greater than that of LPNs in every year.  Also, the data do not show an increase in the percent of RNs working in nursing and personal care facilities; this share stays near 7 percent in all years. 

In 1984, 6 percent of LPNs worked in offices and clinics of physicians; by 2001, this had increased to 12 percent.  The share of RNs in this work setting likewise doubled, from 5 percent to 10 percent.  There is no obvious trend in the percent of LPNs working for personnel supply services (e.g. temporary agencies), although the percents are lower overall in the 1990s compared to the 1980s.  The same is true for RNs in the data.  Between 1984 and 2001, 2 percent to 9 percent of LPNs (compared to 1 percent to 5 percent of RNs) worked in this industry.  Private households were the work setting of 4 percent of LPNs in 1984.  By 1994, less than 1 percent worked in private households. Less than 1 percent of RNs worked in private households in any year. 

The CPS industry classification system includes a category called “health services not elsewhere classified (n.e.c.).”  In 1984, 3 percent of LPNs were employed in work settings within this broad industry class.  The proportion of LPNs in these work settings increased to 11 percent by 2001.  Similarly, RN employment in this industry category increased – from 5 percent in 1984 to 12 percent in 2001.  Unfortunately, we do not know what precise industries are included in the “health services (n.e.c.)” category.  LPNs also are increasingly working in industries other than those discussed above, such as elementary and secondary schools, colleges and universities, child day care services, public administration, and other industries not traditionally associated with the type of work done by LPNs (e.g., real eState). 

Table 2.9:  Distribution of LPNs by Work Setting

The majority of LPNs work in private sector jobs, and the percent has increased from almost 80 percent to 89 percent between 1984 and 2001.  In 1984, 19 percent Stated that they were employed by government agencies; this share declined to 10 percent by 2001 (Figures 2.6 and 2.7).  Only 0.4 to 2 percent of LPNs reported being self-employed in any year.  The data do not show much change in the employment sectors of RNs.  Between 1984 and 2001, around 80 percent of RNs worked in the private sector, and 20 percent for government.

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Hours of Work

There are several questions in the Current Population Survey that correspond to hours of work.  We report means for the variables denoting total hours worked in the previous week and usual hours worked per week.  There are two variables that denote usual weekly work hours.  The main differences between these two variables follow: (1) one of the variables was introduced in 1994 and the corresponding survey question is asked of all respondents who report having a job the week prior to being surveyed, and (2) the other variable, though available throughout our sample period, has missing values for salaried workers after 1993. 

Figure 2.8 compares the means of the three variables that correspond to hours of work per week.  Between 1984 and 2001, LPNs on average worked more than 34 hours per week, which is the same as RNs.  LPNs worked slightly more on average in 2001 than they did in 1984.  Between 1986 and 1990, mean weekly work hours increased by over 1 hour if measured by usual hours worked per week, and by more than 2 hours if measured by total hours worked last week.  After 1993, LPNs’ mean usual weekly hours of work fall farther below mean total hours worked in the previous week.  This likely is due to the missing values in the data for salaried LPNs from 1994 onward.  However, the variable “total usual weekly hours,” which was added to the survey in 1994, has values for both salaried and hourly workers, and the mean of this variable indicates that LPNs worked 37 to 38 hours per week between 1994 and 2001.  Overall, the CPS data show some evidence of a small increase in the average weekly work hours of LPNs, but there is a high degree of fluctuation in the data, especially during the 1990s.  RNs’ mean weekly work hours hold steady at 36 to 37 between 1984 and 2001. 

Figure 2.7:  Mean Hours of Work Per Week - Licensed Practical Nurses

Source: Current Population Survey Outgoing Rotation Group Files, 1984-2001

The majority of LPNs work full-time, and the share working full-time increased between 1984 and 2001.  The CPS asks respondents that work less than 35 hours per week what their main reason is for working part-time.  The reasons reported by the CPS have changed over time. Between 1984 and 1993, the reasons identified in the CPS include slack work or business conditions; could only find part-time work; own illness, health, or medical limitations; too busy, didn’t want full-time work; reported less than 35 hours, but usually works full-time; and all other reasons.  Since 1994, additional reasons are seasonal work, childcare problems, other family/personal obligations, school or training, and retired or social security limit earnings.  Also, “too busy, didn’t want full-time” was dropped from the survey. 

Between 1984 and 1993, most LPNs who reported working less then 35 hours per week responded that they were too busy and/or didn’t want full-time work.  After the survey change in 1994, most responded that they usually do work full-time.   Those reporting slack business or could not find full-time work ranged from less than 1 percent to almost 12 percent between 1984 and 2001.  The highest percentages were during the 1990s. There is no obvious trend in the percent that work less then 35 hours per week because of childcare problems or own illness, health, or medical limitations.  Furthermore, these percentages are small (almost always under 4 percent). From 1994 to 2001, 4 percent to 11 percent of LPNs reported school or training as their reason for working part-time. An increasing percent since 1994 have responded that they are retired or that social security limits earnings: 2 percent in 1994 and 4 percent by 2001.  

Earnings

The Current Population Survey asks respondents who report they are paid by the hour for their hourly pay rate.  As shown in Figure 2.9, the hourly earnings of LPNs increased 19 percent between 1984 and 2001, from $12.21 to $14.56 (all figures are adjusted for inflation).  By 1994, LPNs earned over $14 per hour on average. However, LPNs experienced a slight decline in their hourly earnings between 1994 and 1998, which corresponds to the decline in real RN wages reported by others (Spetz, 1998).  By 1999 LPNs’ mean hourly pay rate had bounced back to $14.  The data for RNs shows a similar pattern—an overall increase of nearly 19 percent ($17.78 in 1984 and $21.15 in 2001) with a slight drop between 1993 and 1997. 

The CPS also collects information on usual weekly earnings before deductions from both hourly and salaried workers.  As shown in Figure 2.10, the weekly earnings of LPNs increased 23 percent between 1984 and 2001.  In 1984, LPNs earned nearly $450 per week on average.  By 1994, this figure had increased to $531.  The data shows a decline in average weekly earnings after 1994.  It wasn’t until 2001 that LPNs’ mean weekly earnings rose above the 1994 value to $555.

Figure 2.9:  LPNs' Mean Hourly Pay Rate (in Year 2002 Dollars)

Source: Current Population Survey Outgoing Rotation Group Files, 1984-2001

Figure 2.10:  LPNs' Average Weekly Earnings (in Year 2002 Dollars), 1984-2001

Source: Current Population Survey Outgoing Rotation Group Files

Summary

In this chapter, we used data from the Current Population Survey, U.S. Census Bureau, Bureau of Labor Statistics, and the National Council of State Boards of Nursing to describe the licensed practical nurse workforce.  Most of the reported figures are weighted estimates. 

We provided corresponding data on registered nurses for comparison, and found the following similarities:

• Both workforces are aging, with LPNs being slightly older on average;
• Males represent a small percent of both workforces, but this percent is increasing;
• The western region of the U.S. has the lowest numbers of LPNs and RNs relative to the population;
• RNs and LPNs share similar employment trends—greater percents were employed in 2001 than in 1984;
• On average, RNs and LPNs work about the same number of hours per week—between 36 and 38 hours;
• The share of RNs and LPNs working in physician offices/clinics doubled between 1984 and 2001, and the share working in health services “not elsewhere classified” increased; and
• The hourly pay rate of RNs and LPNs increased 19 percent between 1984 and 2001.

Differences we found between the two workforces include the following:

• The RN workforce is larger than the LPN workforce, but the actual size of the LPN workforce is unclear since the available data is conflicting;
• Compared to RNs, more LPNs live in the South and fewer in the Northeast;
• Fewer LPNs are foreign-born, whereas an increasing percent of RNs are immigrants;
• RNs work in hospitals in greater proportions than LPNs, and the share of LPNs working in hospitals declined more than that of RNs between 1984 and 2001;
• The percent of LPNs working in nursing and personal care facilities increased between 1984 and 2001, but not the percent of RNs; and
• By 2001, the percent of LPNs working in the private sector was greater than the percent of RNs.

References

Crawford, L. H., Marks, C., Gawel, S. H., White, E., & Obichere, L. (2001). 2000 Licensure and Examination Statistics. Chicago: National Council of State Boards of Nursing.

National Council of State Boards of Nursing. (2004). Home page, from http://www.ncsbn.org/about/index.asp

Spetz, J. (1998). Hospital employment of nursing personnel. Has there really been a decline? Journal of Nursing Administration, 28(3), 20-27.

Spratley, E., Johnson, A., Sochalski, J., Fritz, M., & Spencer, W. (2000). Findings from the National Sample Survey Of Registered Nurses. Retrieved March, from http://bhpr.hrsa.gov/healthworkforce/rnsurvey/rnss1.htm

Unicon Research Corporation. (2002). CPS Utilities, Earner Study, Outgoing Rotation 2001 Software & Documents (Version 5.1). College Station, TX: Unicon Research Corporation.

U.S. Bureau of the Census. (2000). Census 2000 Special Equal Employment Opportunity (EEO) Tabulation. Retrieved January 2004, from http://www.census.gov/hhes/www/eeoindex.html

U.S. Bureau of Labor Statistics. Occupational Outlook Handbook:  Licensed Practical and Licensed Vocational Nurses, 2004, from http://www.bls.gov/oco/ocos102.htm

U.S. Bureau of the Census. (2003). Annual Estimates of the Population for the United States and States, and for Puerto Rico: April 1, 2000 to July 1, 2003, 2004, from http://eire.census.gov/popest/data/States/tables/NST-EST2003-01.php

U.S. Bureau of the Census. Current Population Survey, 2004, from http://www.bls.census.gov/cps/cpsmain.htm

U.S. Department of Health and Human Services, D. o. N. (1985). First National Sample Survey of Licensed Practical/Vocational Nurses, 1983. Springfield, VA: National Technical Information Service, Accession No. HRP 0906278.

Chapter 3:  Scope of Practice and Practice Acts 

Each of the 50 States, the District of Columbia, the U.S. territories (Guam, U.S. Virgin Islands, American Samoa, and Puerto Rico), and the Commonwealth of the Northern Mariana Islands, have Boards and legislation regulating the practice of registered and practical nursing, as well as advanced practice nurses and other workers ^[1]. These documents display both similarities and differences in legislation, language, and scope of practice.  In order to provide an overview of the scope of practice of the practical nurse in the U.S., this chapter summarizes major similarities and differences in the practice of LPNs and provides a methodology for categorizing the practice acts.  Additionally, based on scope of practice data, we discuss issues that limit the utilization of LPNs in various States and settings.

With the exception of four States, the 56 boards have a single governing board that oversees the practice of both RNs and LPNs.  California, Georgia, Louisiana, and West Virginia have separate boards for RN and LPN practice. Texas changed to one board on February 1, 2004. The National Council of State Boards of Nursing (NSBCN) (National Council of State Boards of Nursing, 2004) is a not-for-profit organization whose membership is comprised of  the boards of nursing of the 50 States, the District of Columbia, four United States territories--American Samoa, Guam, Puerto Rico, the Virgin Islands--and the Commonwealth of the Northern Mariana Islands. The purpose of NCSBN is to serve as an organization through which boards of nursing cooperate and work together on matters of common interest and concern affecting the public health, safety and welfare, including the development of licensing examinations in nursing. NCSBN's activities include developing the National Council Licensure Examination for Registered Nurses (NCLEX-RN®) and the National Council Licensure Examination for Practical Nurses (NCLEX-PN®), performing policy analysis and promoting uniformity in relationship to the regulation of nursing practice, disseminating data related to the licensure of nurses, conducting research pertinent to NCSBN's purpose, and serving as a forum for information exchange for members.  NSBCN has developed a model nurse practice act that can be used by the members to guide legislation. 

Typically the boards have basic practice acts and documents related to scope of practice, including the education and training that is required for the practice of practical nursing, and what work LPN basic education allows.  Most boards then allow for expanded practice with additional education.  The most common areas for expanded practice relate to intravenous infusions, intravenous medications, hemodialysis, and supervision of other staff.  In order to engage in expanded practice, the practical nurse must obtain further training and/or certification.  Generally, the practice acts declare that the practical nurse must work under the supervision of a registered nurse, a physician, and, in some States, pharmacists, podiatrists, or others. 

The typical paths to licensure are examination, endorsement, and temporary licensing.  For example, California allows application for the licensing examination in five ways: 1) after completion of an approved in-State program, 2) after completion of an approved out-of-State program, 3) with equivalent experience (such as having worked as a nurse aide and taking a pharmacy course), 4) with experience as a military corpsman, and 5) after the first year of an RN program.  In an interview that took place in February 2003, Suellen Clayworth of the California Department of Consumer Affairs, Board of Vocational Nursing and Psychiatric Technicians, Stated that “there was a period of time that California did not use the standardized examination and nurses who were licensed during that time may not get endorsement to other States.”  Until 1974, California used the National League for Nursing examination.  From May 1974 through March 1986 California used a State constructed licensure examination.  People licensed during this time may not be able to get endorsed to other States.  According to Ms. Clayworth, the State began using the NCSBN licensure examination in October of 1986.  Because of examination standardization, most States now approve endorsement of currently licensed practical nurses from other States.

States have elected to explicate the work of practical nurses in a variety of ways. Some, such as Louisiana, Montana, Maine, and Nevada, have detailed lists of tasks that practical nurses can and cannot do.  Other States, such as Georgia, Alaska, Kentucky, and Oklahoma, have decision trees that are to be used to decide on appropriate tasks that can be done.  Connecticut has an extensive algorithm for decision-making that can be used regarding issues of practice. Washington has a decision tree that is used for making decisions and specifically States that there is no “laundry list” of approved and prohibited tasks. Some States such as Colorado and Nebraska use the sections of the nursing care plan to detail work that can be done by different nursing personnel (RNs, LPNs, and aides).  South Carolina has developed extensive skills charts that are organized by body system, job categories, and experience level within job categories.  Neither Michigan nor Texas has a scope of practice or practice act for practical nurses.

There are several points of contention that exist in the scopes of practice of registered nurses and practical nurses.  These issues typically surround the words “assessment”, “delegation”, “supervision or charge nurse” and, more recently, “decision-making” and “critical thinking”.  Since the American Nurses Association defined registered professional nursing as the diagnosis and treatment of human responses to actual or potential health problems, assessment has been a key to the boundary of practice between the registered nurse and other nurses and nurse assistants.  Practical nurses and nurse assistants are permitted to “collect data” rather than assess patients; however, the boundary between data collection and assessment is difficult to define.

Delegation has traditionally been thought of as a management function reserved for the registered nurse.  However, practical nurses delegate functions to other providers in many settings, and some practice acts acknowledge that fact.  The positions of supervisor and charge nurse are similar, in that those roles traditionally involve management. In long-term care settings practical nurses function in those roles routinely.  In 1994, the U.S. Supreme Court upheld a decision by the Sixth Circuit Court of Appeals that said in that case, the licensed nurses involved were supervisors, and therefore no longer covered by collective bargaining agreements (Supreme Court of the United States, 1994) .  The concepts of decision-making and critical thinking are now included in some scopes of practice, usually in order to define the practice boundary between the practical and registered nurse.  However, as with the term “assessment”, it is difficult to argue that practical nurses do not engage in decision-making and critical thinking activities. 

As in many fields, the professions of RN and LPN seek to protect and expand their jobs and opportunities.  The scope of practice regulations delineate the roles of these licensed nurses and thus RN and LPN organizations lobby for scopes of practice that protect jobs.  Additionally, in States with powerful RN unions, union contracts and proposed legislation have been explicit about what is and is not the practice of the RN, as compared to the LPN.  For example, there has been a controversy in California over whether or not LPNs may administer intravenous medications to patients as part of hemodialysis and blood bank procedures. (Editor, 2003)   The California Nurses Association (CNA), which represents RNs, bitterly opposed a change in regulations permitting these activities, while Service Employees International Union (SEIU), which represents LPNs and other hospital workers, supported it.  On January 29, 2003, the California Office of Administrative Law approved the new regulation. (Editor, 2003)

When there are shortages of registered nurses, licensed practical nurses often are suggested as substitutes for RNs, or as members of multidisciplinary care provision teams.  The ways in which patient care can be allocated across employees depends on the legal scopes of practice of LPNs.  In order to better understand the scopes of practice of LPNs, we obtained documentation from virtually every board that regulates the practice of practical and vocational nurses.  Our underlying hypothesis was that there is variation in the “restrictiveness” of the scopes of practice for LPNs, and that this restrictiveness influences the role and flexibility of LPNs in work settings.  The data show substantial variation in the restrictiveness of scopes of practice, but there also are complexities that require additional explication.  As we reviewed the practice acts and scopes of practice information, we determined that there was also variation in the specificity of scopes of practice.  Some practice acts and supporting documents are highly specific and others are very vague in describing the roles LPNs can play and the tasks they can complete.  Thus, we found that practice acts were variable both in the way the States restricted or enlarged the roles of LPNs and in the specific or nonspecific language they used to detail the roles.  We determined that in order to discuss the practice acts and related documentation reasonably, we would categorize the States based on both restrictiveness and specificity of the scopes of practice.  To determine our ratings, we relied upon supporting documentation, key informant interviews, focus group data, Web based information, and telephone interviews (Appendix C). 

We defined the term restrictiveness as limiting the level of autonomy, flexibility, or independence in the practice of LPNs.  The term specificity was defined as explicating or not the defined parameters of practice of LPNs. We created categorical scales for each of the terms and evaluated each State’s scope of practice documents (Appendix C).  The scales included the following instructions and relative values.

Restrictiveness

As a relative value, on a scale of 1-4, with 1 being the least restrictive and 4 being the most restrictive, categorize each State’s LPN scope of practice.  “Restrictive” is defined as not allowing a level of autonomy, flexibility, or independence in the practice of LPNs

4- Most Restrictive – allows limited practice under the direct supervision or delegation from an RN or physician, usually allows some IV infusion administration with additional training, but no administration of IV medications.

3- Fairly Restrictive – allows limited scope of practice with some direct supervision.  IV medication administration of premixed solutions is allowed, as well as other functions that may include IV insertion and maintenance. 

2- Somewhat Restrictive – IV medication administration of premixed solutions allowed, as well as the functions allowed under #3. An additional 2-3 functions are allowed, but not the advanced functions such as those listed in #1

1- Least Restrictive – allows the broadest scope of practice that may be delegated but not directly supervised.  Allows broad range of practice including IV therapy, and in addition several additional advanced functions such as administration of cancer agents, hyperalimentation, arterial blood draws, or patient assessment.

Specificity

As a relative value, on a scale of 1-4, with 1 being the least specific and 4 being the most specific, categorize each State’s LPN scope of practice. Specificity is defined as explicating defined parameters of practice of LPNs.

4-Most specific – Documents are clear and there are detailed regulations with consistent telephone information.  Regulations list specific permitted and prohibited activities.

3-Fairly specific – Documents have specific information about permitted activities, but the information is not detailed or complete. Information obtained by telephone also is not complete and allows some room for interpretation. 

2-Somewhat specific –Little information is provided with the regulatory documents about specifically permitted and prohibited activities.  The telephone information is answered with little detail.

1-Least specific – There is little information in regulatory documents, and no or limited telephone information.

Methodology for Assigning Categories

The three principal investigators for the study, two registered nurses and one economist, met to categorize the practice acts of the boards.  We individually reviewed documentation for every board and each reviewer made a determination of specificity and restrictiveness based on individual experience and expert judgment.  We read all available documentation, including Web based information, telephone interviews, focus group data, and key informant information, but did not discuss our decisions with each other.  We individually categorized both restrictiveness and specificity for every board and completed the scale forms. A research assistant entered the results of the initial determinations into a database.

After the data were entered, one of the reviewers evaluated the results of the three scores. If all three reviewers agreed on a score, the score was accepted.  If two reviewers agreed and the third score did not differ by more than 1 point, the majority score was accepted.  If there was no agreement among the three reviewers, or if there was a difference of more than 1 point in any of the three scores, the file was pulled for further review.  In the initial review, we had insufficient data to review the three territories and the commonwealth.  For the restrictiveness scale, there were 40 scores that met the criteria for agreement and 12 that were reviewed a second time by all reviewers.  For the specificity scale, there were 32 scores that met the criteria for agreement and 20 that were reviewed a second time by all reviewers.  During the second review, the reviewers discussed the issues until agreement was reached. 

Results

[D]

As noted in Figure 3.1, most of the States are in the first or second categories of restrictiveness. There are 13 boards in the two most restrictive categories.

[D]

As noted in Figure 3.2, most States are in the first or second category of specificity, meaning that most States do not have very specific scopes of practice for LPNs.  Eighteen States are in the more specific categories.

Based on the focus group data from four States (Louisiana, Massachusetts, California, Iowa), we have indications that individual employers restrict practice of practical nurses even more than regulations require.  A number of the focus group members remarked that they were surprised when the facilitator read the actual scope of practice documents.  Their responses varied from, “I am not going to mention this to my employer because I will have to do more for the same pay” to “I am going to go back and ask my employer why the practice is restricted more than the legislation allows.”

Conclusion

Our data indicate there are similarities in the practice acts across States but variation in how the States express the details of the work of practical nurses.  The data also indicate that most States are flexible in the practice requirements and not overly specific in the tasks that are enumerated. However, there are a number of States with restrictive practice or very specific detailing of tasks that can and cannot be done by practical nurses.  These data are used in Chapter 5 to examine whether the restrictiveness and specificity of the scope of practice affect demand for LPNs.  The descriptive data presented above suggest that it may be possible to identify States that could reasonably increase their utilization of practical nurses by reducing the restrictiveness of their practice.

References

Editor. (2003). Vein of controversy:  The dispute over LPN scope of practice goes to court. Nurses World Magazine, October 12-16.

National Council of State Boards of Nursing. (2004). Home page, from http://www.ncsbn.org/about/index.asp

Supreme Court of the United States. (1994). NATIONAL LABOR RELATIONS BOARD, PETITIONER v. HEALTH CARE & RETIREMENT CORPORATION OF AMERICA on writ of certiorari to the united States court of appeals for the sixth circuit; No. 92-1964; May 23, 1994, from http://supct.law.cornell.edu/supct/html/92-1964.ZO.html

Chapter 4:  Education of LPNs

Background

The scope of practice and job roles of practical nurses depend, in large measure, on education and training programs.  As with curricula for RNs, the approval of training curricula for LPNs rests with the governing board in each State or territory.  The governing boards’ responsibilities include approving new training programs, reviewing existing training programs, issuing and re-issuing licenses, monitoring practice, administering disciplinary actions, and providing information regarding practice. Boards define curricular requirements in a variety of ways.  As with practice acts and scopes of practice, substantial similarities and some variation in legislation, wording, and actual practice exist in curricular requirements, faculty requirements and other areas of the education process.  This chapter will summarize major similarities and differences in the education of LPNs and provide data on national and State trends in LPN education. 

Method

In order to examine the education of LPNs, we collected data from a number of sources.  Data sources include: (1) U.S. Bureau of Health Professions’ Area Resource Training File (February 2003 Release), (2) National Center for Health Workforce Analysis, Bureau of Health Professions, Health Resources & Services Administration, Department of Health & Human Services, (3) National Council of State Boards of Nursing (NCSBN), and (4) primary data from individual Board Web sites and telephone interviews. 

Findings

Curricula

Many State and territory boards use the model developed by the National Council of State Boards of Nursing to guide the language of their regulations related to education and curriculum for practical nursing programs.  Most boards have similar ways of describing the administration of the program, the faculty requirements, how to open and close a program and the curricular content.  However, curricular requirements vary in specificity, as do the scopes of practice.  For example, Arkansas describes specific content to be taught in theory and clinical courses.  California and Delaware have detailed faculty qualifications.  Arizona and Missouri specify the NCLEX pass rate required in order for the program to remain in good standing with the Board.  Some States, such as California, Alaska, Arkansas, Illinois, and the District of Columbia, have continuing education requirements and describe what can and cannot be approved.  Arizona and Delaware’s documents discuss the requirements for refresher courses.

Each board tries to provide guidelines for the programs and schools to ensure adequate training of the student.  The greatest degree of variation in LPN education is in the required length of the educational programs.  Although most programs can be completed in a calendar year, there are exceptions. North Dakota has an associate of science degree for practical nursing that requires 2 or more years of study.  California States that programs must be greater than or equal to 1,530 hours or 50 semester units, with theory accounting for 576 hours and clinical training accounting for 954 hours.  Connecticut requires that programs last for 230 days.  Indiana specifies that programs must last two semesters and one summer, or four quarters.  Louisiana sets a specific number of hours for given topics of study.  Missouri requires no less than a 10-month program.  Oklahoma requires that programs last between 1300 and 1600 clock hours or 32-40 semester hours.  Each board has mechanisms to evaluate LPN programs, for both the establishment of a new program and re-approval of an existing program.

Trends in LPN Education

Figure 4.1 illustrates the number of graduates, enrollment, and admissions in U.S. practical nursing schools from 1976 to 1998.  Specific information by State and school are in the appendix.  Over the 22 years shown, there have been cycles of growth and decline, but the decline has been persistent since 1994.  After 1994, there was significant downsizing of U.S. hospitals, as a result of the growth of managed care health insurance plans and other cost-containment programs, which was accompanied by lower demand for nursing personnel.  Appendix D1 presents the detailed information shown in the figure.

Figure 4.1:  LPN Admissions, Enrollment, and Graduation Data for the U. S.

Source: Area Resource Training File (February 2003 Release), National Center for Health Workforce Analysis, Bureau of Health Professions, Health Resources & Services Administration, Department of Health & Human Services

Figure 4.2 illustrates the number of programs and schools in the U.S. over the years 1976 to 1997.  Since the 1990s, the number of LPN programs has remained relatively stable.  Thus, since 1994, there has been a decline in the number of students each program has enrolled and graduated.

Figure 4.2:  Practical Nurse Programs and Schools in the U.S.

[D]

Table 4.1 presents information about active licenses of both registered and practical nurses in the U.S. between 1987 and 2000.  There has been a gradual increase in the number of active licenses of both registered and practical nurses since the late 1980s.  Even though the number of new graduates has been declining since the early 1990s, the size of the LPN workforce has been rising.  This suggests that the flow of LPNs out of the workforce is smaller than the inflow of new graduates, even though the inflow is dropping.  The age distribution of LPNs is skewed toward older ages, and as these older LPNs retire greater numbers of new graduates will be needed to maintain the LPN supply.

Table 4.1:  Total Number of Active RN & LPN Licenses, 1987-2000

Table 4.2 provides the number of LPNs who have taken the NCLEX-PN, and the percent passing the exam.  The data are available from 1997 through 2000.  Based on these data, in 1997 43,352 U.S.-educated LPN candidates took the examination for the first-time.  This number is much larger than the 24,522 graduates reported that year in the Area Resource File.  According to the user documentation for the Area Resource File (February, 2003 release) (Bureau of the Health Professions, 2003) the Area Resource File is likely to underState the number of graduates because some schools withheld data.  We anticipate that the number of U.S.-educated LPN candidates taking the exam for the first time most accurately represents the number of graduates from LPN programs.

Table 4.2:  Number of Candidates Taking NCLEX-PN® and Percent Passing, by Type of Candidate

Summary

Since the 1990s, the number of LPN programs has remained relatively stable but there has been a decline in number of graduates.  Therefore, since 1994, there has been a decline in the number of students each program has enrolled and graduated.  The total number of active licenses of LPNs increased slightly through the 1990s.  This suggests that LPNs are remaining in the workforce or keeping their licenses active.  The number of first time U.S. educated graduates who are taking the NCLEX-PN has dropped, but the percentage of those passing the examination has remained relatively consistent.

LPN educational curricular requirements vary among the States and territories.  Most States specify the content and number of hours of training, some more detailed than others.  However, most curricula teach similar basic nursing skills training, such as vital signs, patient data collection, patient care and comfort measures, and medication administration.  Additionally, most have added requirements for more advanced skills, such as IV infusion and IV medication administration.  Even though requirements vary, endorsement of LPNs from one State to another is generally done smoothly.  Therefore, the States recognize the similarities of the training programs, even though they have differences.

References

Bureau of the Health Professions. (2003). Area Resource File (February 2003 Release). Washington, D.C.: Department of Health and Human Services.

National Center for Health Workforce Analysis. (2004). 2004, from http://bhpr.hrsa.gov/healthworkforce/

National Council of State Boards of Nursing. (2004). Home page, from http://www.ncsbn.org/about/index.asp

Chapter 5:  Factors Affecting the Supply of and Demand for LPNs

The labor market for licensed practical and vocational nurses consists of two components: the supply of LPNs and the demand for LPNs.  Both supply and demand should be affected by the wage paid to LPNs.  When wages rise, LPNs should find employment more attractive and increase their supply of labor.  Conversely, higher wages increase the cost of hiring to employers and thus demand should decline.  When there is a shortage or surplus of LPNs, wages should adjust to rectify the imbalance.

Numerous other factors can affect the supply of and demand for LPNs, however.  The family circumstances of LPNs may prohibit them from working full-time, and regulatory requirements might lead to higher or lower demand for LPNs.  This chapter examines the underlying supply of and demand for LPNs to identify the factors that affect LPNs’ decisions to work and employers’ demands for them.

The Supply of LPNs

A Conceptual Model of the LPN Supply

Labor markets for licensed nurses generally are not national in scope.  In some geographic regions there are few employers and these employers may have a high degree of control over the local labor market.  Other nursing labor markets are very competitive, with a plethora of employers.  Because job opportunities for licensed nurses are plentiful at nearly all times, nurses usually do not need to relocate to find interesting and rewarding work. 

The supply of nurses consists of nurses with active licenses.  Some of these nurses are not working in nursing, but they are part of the current pool of nurses potentially available to work.  The supply of nurses to a local labor market increases as nurses flow into the labor market by graduating from nursing programs, migrating from other regions, immigrating from other countries, or increasing hours worked.  The supply of nurses declines with retirements, migration out of the region, decreasing hours worked, and career changes out of nursing.  Figure 5.1 summarizes the labor flows in and out of the stock of licensed nurses.

The primary source of growth in the nursing workforce is graduations from nursing programs.  These graduations generally stem from interest in the nursing profession.  For the first part of the 20th century, licensed nursing was one of a few occupations widely open to women.  Most women faced limited career choices, and nursing was an attractive option to women who were interested in science.  As career opportunities expanded for women in the last quarter of the 20th century, however, nursing had to compete with numerous other attractive professions for new entrants.  It has been suggested that women now are less likely to choose a traditionally female-dominated career such as nursing (Buerhaus, Staiger, & Auerbach, 2000) .  However, an annual survey of 350,000 first-year college students across the U.S. found that the percent of students planning on a career in nursing remained steady at five percent between 1966 and 1996 (Astin, 1998).

Regional and international migration of LPNs has not been measured in any data sources of which we are aware.  The National Council of State Boards of Nursing does not maintain a national database of LPN licenses, and States do not link their licensure files so that LPNs can be tracked as they move from State to State.  LPNs do not exist in most other countries, so international migration of LPNs is not an important source of new LPNs.  This is reflected in the fact that relatively small and stable shares of LPNs are immigrants, as reported in Chapter 2.  Some registered nurses educated in other Nations do not pass the RN licensing board examination when they immigrate and subsequently take the LPN licensing examination.  To our knowledge, no source of data measures the extent to which this occurs. 

Figure 5.9: Flows and Stock of Licensed Practical/Vocational Nurses

The outflow from the supply of LPNs consists of nurses who retire, choose to permanently leave the profession, or who migrate to other countries or regions.  Unfortunately, there is no data with which one can examine any of these phenomena.  If a LPN allows his or her State license to lapse, it is not possible to identify whether the LPN obtained a license elsewhere, and thus we do not know if the LPN has left the supply of nurses.  LPNs who have active licenses but are not working are not identified in any national survey.  National data such as that collected by the Bureau of Labor Statistics and Bureau of the Census identify LPNs by their current occupation, and thus very few LPNs who are not working are identified in these data.

Thus, little can be said about important components of the inflow and outflow of LPNs.  The behavior of LPNs who are actively licensed and consider their current occupation to be that of LPN can be examined using the annual Current Population Survey conducted by the Bureau of Labor Statistics and the Bureau of the Census.  Many characteristics of these LPNs are available from these surveys, and the factors that affect labor supply can be considered in depth.

Data for Supply Analyses

We use data from the 1994-2001 Current Population Survey (CPS) Outgoing Rotation Group (ORG) (U.S. Bureau of the Census, 2004) to analyze factors that influence the supply of licensed practical nurses.  In order to identify licensed practical/vocational nurses in the Current Population Survey, we utilize the occupation codes.  With these codes, we identified 4,736 LPNs in the 1994-2001 CPS ORG files.  The resulting dataset used to estimate the supply of licensed practical nurses in the U.S. has 4,616 observations.  This number does not match the total number of LPNs in the 1994-2001 CPS ORG files since we delete LPN observations that have extreme values (defined as over the 99th percentile) for the earnings and work hours variables used in our analysis. 

Methods of Analysis

Economic theory suggests that an individual’s work decision is a function of individual (demographic) characteristics, family characteristics, and labor market conditions.  We use the Current Population Survey’s demographic and labor force information on LPNs to create variables for our models of the supply of LPNs.  The demographic variables in our models include the following: gender, age, educational attainment, race/ethnicity, and citizenship status.  Family characteristics included in our analysis are marital status, number of kids in household by age category (e.g. number of kids aged 0 to 5 in same household as LPN), and household earnings (defined as the sum of weekly earnings of all household members minus the LPN’s weekly earnings). 

Labor market variables were generated using the geographic and earnings data in the CPS.  We created dummy variables for each region in the United States (Northeast, Midwest, South, and West), and for the population size of the metropolitan statistical area in which LPNs in our sample reside.  Also included is the percentage of licensed practical nurses unionized in the LPN’s State of residence.  The market wage for LPNs is an important labor market condition.  We generate State-level market wages using hourly earnings from our sample of LPNs.  Because we had small numbers of observations for some States, we used a complex method to determine markets wages.  Each wage is based on 3 years of data, so the wage of a single year is the median of the wages of that year and the years immediately preceding and following that year.  For example, the market wage for 1990 is the median of the wages for 1989, 1990, and 1991. 

We then group LPN observations in each State based on whether they resided in a metropolitan statistical area (MSA).  Those residing in an MSA are considered to be living in an urban area, while those not residing in an MSA are considered to be in a rural area.  Using this information, we calculate urban and rural LPN wages for each State.  Since sample sizes were small for several States, we decided that the market wage associated with each LPN would have to be calculated from at least 15 observations.  We used the following algorithm to assign market wages: if LPN lives in an urban area in a State and the median urban wage for that State is calculated from at least 15 observations, then the market wage is the median urban wage; otherwise, the market wage is the State-level median wage.  Substituting “rural” for “urban” in the above algorithm explains the logic for assigning a market wage to LPNs residing in rural areas of a State.  Thus, we have three potential market wages for each State, but only one is matched to each LPN in our sample.

Even though we assume market wages are exogenous in our labor supply equations, we cannot rule out the possibility that they are determined simultaneously with supply, thus potentially biasing our estimates.  To address this concern, we use two-stage least squares regression as a specification check.  This technique produces predicted values for wages after estimating a wage equation. ^[2] We then use these predicted wages in our labor supply regressions, and compare the results with those from the regressions in which market wages are used.  As a third specification, we calculate wages for the LPNs in our sample who report being employed.  The CPS has data on usual weekly earnings and usual weekly hours of work.  We divide usual weekly earnings by usual weekly hours of work to obtain a measure of own wage for each LPN in our sample who reports being employed.  We then estimate the supply equations using own wages for working LPNs and predicted wages for non-working LPNs.  Thus, we run three regressions for each supply model, each with a different measure of wage.

We focused on three outcome measures in our analysis: (1) the probability of working (labor participation), (2) the probability of working full-time, defined as usually works 30 or more hours per week, and (3) usual hours of work per week.    We model each of these to examine the factors that affect the supply of licensed practical nurses.  Appendix E1 reports the means of the variables in the dataset used to estimate the supply of LPNs.  We discuss trends in the variables here.

Several of the demographic variables show an upward trend in their mean values during our sample time period. These variables include age, and the proportion of LPNs who are black, Native American, have completed some college, and hold an AA degree.  Those with a downward trend are the proportion of LPNs who are white and the percent that have no more than a high school education.  These trends were discussed in detail in Chapter 2.

The data show an increase in the percent of LPNs holding more than one job, usual hours worked per week, and usual weekly earnings before deductions.  Notably, the means of our wage variables follow a similar pattern over our sample time period.  They decrease until 1997 and then climb to near their 1994 values by 2001. Most of the market characteristics in the dataset exhibit a trend in their mean values.  Union representation/coverage of LPNs decreased, as did the share of LPNs residing in the Northeast and West, and the percent living in metropolitan areas with a population of 500,000 to 2.5 million.  The percent of LPNs in our sample that live in the South increased between 1994 and 2001, as did the proportion residing in rural areas. 

LPNs in our sample also increasingly worked for private employers, in personnel supply services, and the offices of physicians.  The share working for government and the percent who are self-employed declined during our sample time period.  The only family characteristic exhibiting a trend during our sample time period is household earnings, which increased between 1994 and 2001.

Factors That Affect the Employment of LPNs

Table 5.1 presents the estimated coefficients and marginal effects from probit regression equations of the likelihood of a LPN being employed using the Current Population Survey data for 1994 through 2001.  The marginal effect measures the increase in probability resulting from increases in the explanatory variable in the regression equation.  For example, the marginal effect of living in the Midwest is 0.016.  The explanatory variable has a value of 1 if an LPN lives in the Midwest and 0 otherwise.  Thus, living in the Midwest increases the probability of being employed 1.6 percentage points, which is the product of the marginal effect and the change in the explanatory variable.  In the regression equation tables, the statistical significance of the coefficients is indicated.  We focus our discussion on explanatory variables that are significant with a p-value of 0.05, meaning there is a 5 percent chance that the identified relationship is spurious.

The first three columns in Table 5.1 report the estimated coefficients, robust standard errors, and marginal effects for the regression in which market wages are included as an explanatory variable.  The next three columns report estimates for the two-stage least squares model in which predicted wages are used, and the final three columns report results from the regression in which the wage is defined separately, as described above, for working and non-working LPNs. From this point forward, we refer to this last measure of wage as “own wage.”

The results from the probit regression with market wages as an independent variable are quite similar to the results from the two-stage least squares regression in which predicted wages are used to estimate the supply model.  The probit regression in which own wages are used produce surprising results, especially concerning the effect of wage.

Though not statistically significant, the estimated coefficients on market wage and predicted wage and their squared values have the expected sign.  However, when estimating the model using own wages, we find a negative and statistically significant coefficient on wage.  The marginal effect implies that a one-dollar increase in wage decreases the likelihood of a LPN being employed by 1.4 percentage points.  Furthermore, the wage-squared coefficient is positive and statistically significant, implying that as the wage increases beyond a certain point, LPNs are more likely to work. This result is opposite the pattern found in many studies of labor supply.  The likelihood of employment typically rises with wage at nearly all wage levels.  It is important to note that the LPNs in our sample have very high labor participation rates, ranging from 92 percent to 96 percent during our sample time period of 1994-2001.  Thus, there is little variation in our outcome variable, and this may affect our regression results.  Nevertheless, several of the coefficients of the remaining explanatory variables across all three specifications of our model are in agreement with economic theory.

Demographic characteristics are important predictors of employment of LPNs.  The likelihood of working initially increases with age, by 0.1 to 0.4 percentage points, and then decreases as indicated by the coefficients on age squared.  The inflection points calculated from the marginal effects indicate that LPNs are less likely to work after age 38 (first specification), 40 (second specification), or 50 (third specification). Native American LPNs are 2.5 to 7.6 percentage points less likely to be working than white LPNs.  Black LPNs also are less likely to be employed, although the degree of statistical significance is lower in two of the specifications.  In contrast, Asian LPNs are more likely to be working, although this result is only statistically significant at a higher p-value.  LPNs who are US citizens by naturalization are 0.6 to 3.4 percentage points less likely to be employed than are US-born LPNs.  In the regression with market wage as an independent variable, LPNs who are not U.S. citizens also are less likely to be employed.

Family characteristics do not appear to be strong predictors of labor force participation.  In all three specifications of the model, only household earnings have a statistically significant relationship with the likelihood of working for LPNs.  LPNs are less likely to work as the earnings of other household members (such as the LPN’s spouse/partner) increase.  However, the marginal effects are practically zero. 

Table 5.1:  Probit Results for Probability of Working

The labor market in which the LPN resides affects employment opportunities, and cultural differences across regions also may affect the likelihood of working.  As compared to LPNs living in the West, Midwest LPNs are 0.2 to 1.6 percentage points more likely to work. 

It is important to note that LPNs are identified by their self-reported occupation, and thus LPNs who are not working in nursing may not identify themselves as LPNs.  The CPS data thus likely overstate the probability of employment, and regression equations estimated for a broader sample of LPNs might produce different results

The Hours Worked by LPNs

Once an individual decides to work, a decision must be made about the extent to which to work.  Employees can work part-time or full-time, and the number of hours per week they work can vary.  Personal, family, and labor market characteristics affect the decision of how much to work.  To explore these relationships, we estimate regression equations similar to those estimated for whether a LPN is working. Table 5.2 presents probit regression equations for the probability of a LPN working full time (i.e., 30 or more hours per week).  Again we run three regressions, each with a different measure of wage.  The first specification, using market wages as an explanatory variable, is restricted to LPNs who report working, and thus the regression results only apply to the population of working LPNs.  The remaining specifications use the full sample of LPNs.  Despite differences in how we define the wage variable (and, thus, the wage-squared variable) in each of the three specifications of the model, the regression results are similar.

In all three specifications, the estimated coefficient on wage is positive.  It also is statistically significant except in the regression using predicted wages as an independent variable for all observations.  For the sample of working LPNs (specification (1)), a one-dollar increase in the market wage increases the likelihood of working full-time 6.8 percentage points.  In specification (3), a one-dollar increase in own wage increases the likelihood of full-time employment 2.6 percentage points.

Table 5.2:  Probit Results for Probability of Working Full-Time

To check for the possibility of backward-bending supply, we included wage-squared as an independent variable.  The estimated coefficients are negative in all three specifications, and statistically significant in the regressions with market wages and own wages. The negative coefficients across the three specifications provide evidence that the labor supply of LPNs is backward bending, indicating that after a point, further wage increases reduce the likelihood of working full-time.  A possible explanation is that LPNs want to earn a target income, and as wages rise they need to work fewer hours to reach this target. 

Demographic characteristics are important predictors of whether LPNs work full-time.  Notably, the same demographic variables have statistically significant coefficients regardless of how we define wages.  Furthermore, there is very little difference in the marginal effects.  For example, black LPNs are 3.5 to 3.7 percentage points more likely to work full-time than are white LPNs.  Male LPNs are 7.0 to 7.2 percentage points more likely than females, and LPNs who are naturalized citizens are 8.3 to 8.6 percentage points more likely than U.S.-born LPNs.  LPNs with some college education but no degree are less likely to work full-time than LPNs who have never attended college.  Finally, LPNs are more likely to work full-time until their late thirties or early forties, after which time age has a negative association with the likelihood of working full-time.

Family characteristics also are important factors for LPNs in deciding whether to work full-time.  As the earnings of other members of the household increase, the likelihood of a LPN working full-time decreases.  However the estimated coefficients in all three specifications are small in magnitude and only the coefficient in the regression with market wages is statistically significant.  All three specifications of the model indicate that married LPNs are less likely to work full-time than are LPNs who have never been married.  As expected, the presence of children in the household is negatively associated with full-time work.  The results are similar for each age category and suggest that each child under the age of 18 reduces the likelihood of a LPN working full-time by approximately two percentage points. 

Several market characteristics affect the probability of a LPN working full-time.  LPNs residing in the South are 4.5 to 5.1 percentage points more likely to work full-time than are LPNs in the Western region of the U.S. The results for all three specifications of the model also indicate that LPNs residing in urban areas with a population between 100,000 and 499,999 are less likely to work full-time than those residing in less populated areas. Finally, compared to the beginning of the sample time period, LPNs in 2001 were more likely to work full-time.

Table 5.3 presents regression equations for the usual number of hours worked per week in the past year. As before, we run three regressions, each with a different measure of wage.  When market wages are used, the sample is restricted to LPNs who report being employed.  Otherwise, the full sample of working and non-working LPNs is used. 

The regression results are remarkably similar; however, there are key differences centered on the coefficients for wage.  In the specifications (1) and (2), wage is positively associated with hours of work.  However, this result is only statistically significant when we correct for the potential endogeneity of wages.  In this case, the estimated coefficient implies that LPNs on average work an additional 3.2 hours per week for each dollar increase in wage.  In specification (3), the coefficient on own wage is negative, but statistically insignificant.  Again, we find evidence of a backward bending supply curve.  In all three specifications, the estimated coefficient on wage squared is negative and statistically significant, albeit at a higher p-value. 

Male LPNs work more hours per week than do women, and black LPNs work more hours than white LPNs.  The number of hours worked increases with age until age 39 (37 in specification (3)) after which time age has a negative relationship with hours worked per week.  LPNs who are citizens by naturalization work an average of 2.5 to 2.6 hours per week more than do US-born LPNs.

Family characteristics affect the number of hours worked per week in ways that are consistent with the regression equations that examine full-time versus part-time work.  Married LPNs work approximately 2.2 fewer hours per week than do unmarried LPNs.  Children also reduce hours worked per week, with the effect being largest for children younger than thirteen.  The earnings of other members of a LPN’s household are negatively associated with hours worked per week, but in all specifications the size of the coefficient is so small as to be negligible. 

The average number of hours worked per week varies across regions of the United States.  Southern LPNs work 1.2 to 1.4 hours per week more than do LPNs in Western States, and LPNs living in the Northeast work fewer hours. 

The Demand for LPNs

The demand for licensed nurses is derived from the demand for health care, and is affected by a variety of factors, including the general population’s demographics and health, new medical treatments, health care payment systems, and health care regulations.  Health care providers rely on licensed nurses to provide the majority of direct patient care.  Registered nurses assess patients, develop plans for their care, perform tests, provide medical treatments, plan for patients’ discharges, teach patients and their families how to provide ongoing care, and keep detailed records of all these activities.  Licensed practical and vocational nurses assist in patient assessments and the development of care plans, provide medications to patients, start intravenous fluids, obtain blood samples, and participate in numerous other components of patient care.  Without licensed nurses, many health care providers could not care for patients. 

Table 5.3:  Regression Results for Usual Hours Worked Per Week

*p < 0.10
**p < 0.05

Source: Current Population Survey Outgoing Rotation Group Files, 1994-2001

Notes: (1) in the first column, the sample is restricted to nurses who reported being employed; (2) standard errors (in parentheses) are estimated using the “robust” option in Stata; and (3) all regressions include a constant. 

The dominant employer of licensed nurses is the hospital industry, although RNs are more likely to work in hospitals than are LPNs.  As the number of patients and patient days in hospitals rise, demand for RNs and LPNs rises (Spetz, 1999) .  The increasing acuity of illness of patients in the hospital makes RNs particularly important to hospital care, as does the diffusion of high-technology medical services in hospitals (Spetz, 1999) .  LPNs are generally restricted from giving patients medications through intravenous lines (IVs), administering blood products, and providing other types of care that are critical in the hospital setting.  These restrictions reduce the usefulness of LPNs to hospitals. 

A high share of LPNs work in nursing homes and long-term care facilities; relatively fewer RNs work in this setting.  Patients in nursing homes generally do not receive complex treatments such as IV medication therapy, and thus much of the patient care in nursing homes can be provided by LPNs and unlicensed nursing personnel.  LPNs assist in the ongoing assessment of nursing home patients and the administration of oral medications.  In this section we use hospital and nursing home data to examine the demand for LPNs by these employers.

Data for the Analysis of Hospital Demand

To analyze the demand for licensed practical/vocational nurses in general acute care hospitals, we use 1990-2000 data from the American Hospital Association (AHA) Annual Survey of Hospitals.  This database contains hospital-level information on organizational structure; facilities and services; community orientation; total beds, utilization, finances, and staffing; and location and other geographic codes.  The AHA surveys all hospitals in the United States and the response rate averages 85 to 95 percent annually (American Hospital Association, 1999) .  Thus, in any year, the AHA Annual Survey Database has around 6,000 hospital observations.

The AHA Annual Survey asks hospitals to report full-time and part-time personnel for the total facility and for specific types of personnel, including registered nurses and licensed practical/vocational nurses.  The survey specifically defines full-time as working 35 hours or more per week, and part-time as working less than 35 hours per week (American Hospital Association, 1999) .  The staffing figures reported by the hospitals are then converted by the AHA into full-time equivalent (FTE) measures.  According to the AHA, full-time equivalent figures are calculated by adding the number of full-time personnel to half the number of part-time personnel (American Hospital Association, 1999) .  We use full-time equivalent LPN employment as our measure of LPN staffing for short-term, general acute care hospitals.  However, we should note that this measure potentially overestimates or underestimates the use of LPNs by hospitals.  For example, a nurse who works 20 hours per week and one who works 34 hours per week each would be counted as one-half of an FTE.  Similarly, a nurse who works 35 hours per week and one who works 40 hours per week would each count as one FTE. 

We model hospital demand for LPNs as a function of hospital, patient, and market characteristics.  This model is similar to that used in previous studies of the demand for nurses (Spetz, 1999) .  We construct hospital characteristic variables using data from the AHA.  We measure the quantity of care provided by each hospital in our sample as the number of patient days.  Also included in our model are Medicare’s share of total patient days, and the hospital’s service mix.  Our measure of service mix is the Saidin technology index (Spetz and Maiuro, 2004) .  The Saidin index provides a measure of the degree of technology available at hospitals by weighting each potential service and calculating the sum of weighted services available at each hospital.  The more rare the technology used by a hospital, the higher the weight it receives (Spetz & Maiuro, 2004) .

Patient characteristics in our demand model are the average length of stay (available from the AHA data) and the hospital’s case mix index from Medicare files (available from the Center for Medicare & Medicaid Services).  Both measures control for changes in patient volume, but the case mix index also controls for variation in the complexity or severity of cases treated by hospitals. 

We use data from the 1989-2001 Current Population Survey Outgoing Rotation files and the Bureau of Health Professions Area Resource File (ARF) (Bureau of the Health Professions, 2003) to create market-level variables.  The CPS contains union status information and we use this to create variables denoting the percentage of LPNs, RNs, and all workers in a given State who are covered by or a member of a union.  We calculate market wages for registered nurses, licensed practical nurses, and nurse aides using earnings data from the CPS ORG files.  The market wages are median values calculated from 3 years of data.  For example, 1990 LPN market wages are based on hourly earnings reported by LPNs in 1989, 1990, and 1991.  Furthermore, we calculate these at both the State level and for urban and rural areas within a State.  Thus, for each nurse type, we have with three potential market wages per State.  We attach an LPN, RN, and nurse aide market wage to each hospital observation in our sample depending on the number of observations used in creating the respective market wage.  If the rural or urban wage for a given State was calculated from less than 15 observations, then we assign the State-level wage to the hospital.  Otherwise, we assign the rural wage if the hospital is in a rural area or the urban wage if the hospital is in an urban area.  In the end, each hospital observation in our sample is matched to three market wages, one for each type of nurse.

We also include managed care variables in our demand model, which were generously provided by Douglas R. Wholey of the University of Minnesota.  Managed care activity is measured with two variables: the number of HMOs operating in the county and HMO penetration.  We also create a variable interacting these two measures of the managed care environment, and include this in our analysis (Wholey, Christianson, Engberg, & Bryce, 1997) .  County-level per capita income also is included in the model, and was obtained from the Area Resource File.  Finally, we include the two State-level scope of practice variables described in Chapter 3 in some equations.

We estimated our demand equations including several other variables from the ARF, such as physicians per 1,000 population and the share of population estimated to be aged 65 and over; however, we do not report the results of these regressions because these variables had no statistically significant relationship with our dependent variable, nor did their inclusion affect any other coefficients.  Our dataset for estimating hospital demand for licensed practical nurses contains 54,258 hospital observations over our sample time period from 1990 to 2000. 

As shown in Appendix E2, the average number of full-time equivalent LPNs in our sample of hospitals declined between 1990 and 2000.  In contrast, the mean number of full-time equivalent RNs increased.  As a result of these trends, the ratio of LPNs to all licensed nurses declined during our sample time period. 

All of the variables denoting hospital and patient characteristics exhibit trends in their mean values.  The average number of inpatient days and length of stay declined between 1990 and 2000.  Medicaid’s share of inpatient days increased, however, as did the service mix and the severity of cases treated in our sample of hospitals. 

Market wages for LPNs, RNs, and nurse aides were higher on average in 2000 compared to 1990.  However, the data do not show a continuous upward trend during our sample time period.  RN and LPN market wages increased between 1990 and 1994, and then declined during the mid-1990s.  In contrast, market wages for nurse aides declined during the first half of our sample time period, and then increased between 1994 and 2000.

Other market characteristics in our dataset also exhibit trends.  The degree of HMO penetration increased between 1990 and 2000, as did the average number of HMOs operating in a county.  In addition, the average per capita income in the hospitals’ counties increased during our sample time period.

Methods for Analyzing Hospital Demand for LPNs

In our hospital demand analysis, our dependent variable is the log of the number of full-time equivalent LPNs.  We also log several of our independent variables to normalize their distributions.  Thus, our demand equation is log-linear in form.  Each regression includes dummy variables for each year in our sample.  We estimate robust standard errors using the “cluster” command in Stata because it is possible that observations within a State may not be independent (StataCorp, 2003) .

We use several estimation methods in our demand analysis.  This is motivated by two concerns.  One is that there could be some unknown factor inherent to each hospital that affects its demand for licensed practical nurses.  If this is the case, ordinary least squares (OLS) estimates will be inefficient.  To address this possibility, we estimate fixed effects models to allow for individual hospital effects. 

Another concern is the potential endogeniety of LPN wages¹.  If wages are endogenous in the demand equation, then OLS estimates will be inconsistent.  Thus, we also estimate our demand equation using the instrumental variable procedure in Stata (StataCorp, 2003).  To use this procedure, we have to find variables that are correlated with wages, but not correlated with the error term in our demand equation.  County unemployment rates, obtained from the Area Resource File, have been used as an instrument for nurse wages in other studies (Spetz, 1999) .  As unemployment rates rise, spouses are more likely to be unemployed, and thus the nurse is more likely to work.  We also try two other instruments: the average age of LPNs in the hospital’s market area², and the percent of all workers unionized within the State.  We estimate first-stage regressions for LPN wages including these instruments as explanatory variables, and consistently find that the estimated coefficients on all but the county-level unemployment rates are highly significant.  Thus, we determine that the average age of LPNs and the percent of workers unionized within a State are good instruments for LPN wage in our demand equation.  We further check for the endogeneity of wages by conducting a Hausman test (Hausman, 1978; Kennedy, 1998; StataCorp, 2003) .  The test results provide no evidence that LPN market wages are endogenous in our model.  Thus, we report regression results both with and without instrumental variables, because although theory suggests instrumental variables are needed, the Hausman test indicates they may not be appropriate.

Longitudinal Analysis of Hospital Demand for LPNs

Table 5.4 presents regression equations estimating hospital demand for licensed practical nurses as a function of hospital, patient, and market characteristics.  The first two columns present the ordinary least squares equation coefficients and standard errors.  The second two columns present the results of a fixed effects equation, which includes a dummy variable for each hospital to control for hospital characteristics that are unobserved and constant over time.  The final two columns contain the results of the model estimated with fixed effects and instruments to control for the endogeneity of wages.

Conventional economic theory predicts that demand for employees will decline as their wages rise.  At the same time, demand for a type of employee could rise or fall with the wages of other employees, depending on whether other employees are complements or substitutes.  The results presented in Table 5.4 are consistent with this theory.  Higher LPN wages have a negative effect on demand for LPNs when instrumental variables are used to control for the endogeneity of wages.  The importance of addressing endogeneity is demonstrated by the positive, significant relationship between wages and demand in the uninstrumented fixed effects model.  In all three models, higher RN wages are associated with higher demand for LPNs. This finding suggests that LPNs are used as substitutes for RNs, at least in part.  The fixed effects and instrumental variables models indicate that a ten percent increase in the RN wage will raise LPN demand about two to three percent.  Aide wages have a modest positive relationship to demand for LPNs in the fixed effects equations, with a ten percent increase in the aide wage having less than a one percent effect on demand.  In the ordinary least squares equation, the aide wage has a very large, negative effect on LPN demand.

The volume of patients cared for at a hospital has an important effect on demand for LPNs.  The fixed effects and instrumental variables models estimate that ten percent growth in the number of inpatient days increases the demand for LPNs by about four percent.  Conversely, as the length of stay of these patients rises, the demand for LPNs falls.  The coefficient measuring the relationship between case mix and demand for LPNs is negative as well.  LPNs are less able to care for acutely ill patients, and thus as acuity rises, demand will fall.  Hospitals with a higher level of technology demand fewer LPNs. 

The ability of hospitals to hire staff depends on the revenue received in exchange for patient care services.  Several variables measure the potential revenues available to hospitals.  As the share of patient days reimbursed by Medicaid rises, demand for LPNs also rises.  Medicaid reimbursements to hospitals are known to be low, and hospitals that have high shares of Medicaid patients also typically have large shares of charity and non-paying patients.  Thus, it is possible that this relationship results from hospitals with a high share of Medicaid patients having smaller personnel budgets.  Another possibility is that Medicaid patients are somewhat less acutely ill than are other patients, and thus as the share of Medicaid patients rises, LPNs are better able to care for more patients.

The next three variables measure the relationship between the type of hospital owner and demand for LPNs.  For-profit, district, and government hospitals have greater demand for LPNs than do not-for-profit hospitals, holding other factors constant.  The potential reasons for these findings vary by type of owner.  For-profit hospitals have a financial incentive to hire less-expensive LPNs to increase their profit margins.  District and government hospitals may have smaller personnel budgets because they rely at least in part on tax revenues; thus, they may stretch their budgets with LPNs.

Table 5.4:  Estimates of Demand for Licensed Practical/Vocational Nurses in U.S. General Acute Care Hospitals, 1990-2000

*p < 0.10
**p < 0.05

Sources: American Hospital Association Annual Survey of Hospitals, Current Population Survey Outgoing Rotation Group Files, and Area Resource File.  Managed care data courtesy of Douglas R. Wholey

Notes: (1) the dependent variable is log (Number of Full-time Equivalent Licensed Practical Nurses) (2) all regressions include a constant; and (3) OLS regression uses the cluster (on State) option in Stata.

As HMO penetration and the number of HMOs operating in a county rise, the demand for LPNs falls, and these effects are somewhat accelerated as the interaction between penetration and the number of HMOs rises.  Greater HMO penetration in a market is thought to have a primary effect of reducing revenues available to hospitals.  Such revenue reduction could reduce demand for LPNs because hospital budgets are tighter.  However, HMOs also may value the quality of care offered by hospitals, and thus as HMO penetration increases, hospitals are pressured to favor the hiring of more-skilled RNs while reducing LPN staff.

County income affects demand for LPNs.  As per capita income rises, the demand for LPNs falls.  This relationship may arise if wealthier patients prefer hospitals with more highly skilled staff, and thus hospital demand for LPNs falls.

Statewide unionization of LPNs is associated with greater demand for LPNs in the instrumental variables equation.  This relationship may indicate that unionized LPNs are better able to ensure that they are retained in hospital staffing models. Conversely, LPNs may be more likely to unionize when their numbers are higher in the hospital industry.  RN unionization has no statistically significant relationship to LPN demand.

The coefficients of the yearly dummy variables indicate that there has been some change in hospital demand for LPNs over time. In 1993, demand for LPNs was lower than in 1990, while demand rose from 1995 through 1999.  This period of increased demand coincides with reports that hospitals were redesigning their nursing services to emphasize team nursing and less-skilled nursing personnel.  In these staffing strategies, LPNs would have had a more prominent role, and thus demand for LPNs would have risen. 

Table 5.5 presents regression equations similar to Table 5.4, but the dependent variable is employment of LPNs as a share of all licensed nurses.  In these equations, we can directly compare the effects of explanatory variables on demand for LPNs to demand for RNs.  The results confirm those of the level of LPN employment equations.  Relative demand for LPNs declines as the LPN wage rises, and it rises with growth in RN wages. 

Increases in the number of inpatient days has no effect on relative demand for LPNs, suggesting that hospitals maintain a consistent skill mix even as patient volumes rise.  Longer lengths of patient stays increase relative demand for LPNs, even though they decrease overall demand for LPNs.  Together, these findings suggest that longer lengths of stay are associated with lower overall demand for nursing care, perhaps because the share of patients in intermediate and rehabilitation units increases.

A higher patient case mix reduces relative demand for LPNs, although this relationship is statistically significant only in the ordinary least squares equation.  The coefficient on the technology index is consistent with expectations, in that higher technology reduces relative demand for LPNs.  It is possible that case mix is collinear with both length of stay and the technology index, so the statistically insignificant coefficients for case mix result from multicollinearity rather than a lack of relationship.

Table 5.5:  Estimates of Relative Demand for Licensed Practical/Vocational Nurses

The effects of payer mix and hospital ownership in the relative demand equations are similar to those in the level of demand equations.  Hospitals with higher shares of Medicaid inpatient days have greater relative demand for LPNs, and the relative demand for LPNs falls as HMO penetration and the number of HMOs increases.  For-profit, district, and government hospitals have greater demand for LPNs relative to RNs than not-for-profit hospitals.  Per capita county income also has a negative effect on relative demand for LPNs.  Hospitals in States with higher shares of LPNs in unions have greater relative demand for LPNs.

Relative demand for LPNs declined from 1991 through 2000 (relative to 1990).  Combined with Table 5.4, these findings indicate that although absolute demand for LPNs stabilized in the late 1990s, hospitals have demanded relatively more RNs over time.

These findings demonstrate the importance of wages, hospital characteristics, and payer mix on hospital demand for LPNs.  As hospitals face increased pressure to reduce costs, or face higher wages for RNs and LPNs, the demand for LPNs changes significantly.  There have been periods of time during which LPNs have been considered attractive substitutes for RNs, and other times when demand for LPNs dropped because hospitals preferred RNs.  These demand changes have large effects on the career opportunities of LPNs. 

The Effect of Scope of Practice on Hospital Demand for LPNs

The longitudinal models presented above omit one important factor that could affect demand for LPNs: scope of practice regulations. Using the categorizations of LPN scope of practice created as part of this study, we examined the relationship between the scope of practice of LPNs and hospital demand for LPNs.  This is a complex undertaking, because these things are determined jointly.  For example, a liberal scope of practice may encourage employers to demand LPNs and reduce demand for other workers such as RNs.  However, when there is a shortage of RNs, employers are likely to increase their demand for LPNs and also to lobby State legislatures for expanded scope of practice for LPNs.  Because the relationship between demand and scope of practice is likely to be endogenous, we use instrumental variables to predict scope of practice regulations, in a fashion similar to that used to control for endogeneity of wages.  Our instruments are a set of variables measuring the political characteristics of each State: whether there is Democratic control of both legislative houses and the governorship, whether there is divided control of the legislature and/or governorship, the ratio of per capita State debt to per capita income, whether the governor has a line item veto, the percent of the upper legislative house that is Democratic, and the percent of the lower legislative house that is Democratic.  Mark W. Smith from the Veterans Health Administration Health Economics Resource Center in Menlo Park kindly provided these variables.

Because we have scope of practice data for only 1 year, we estimate the demand for LPNs using only a single year of data.  Table 5.6 presents the results of regression equations for hospital demand for LPNs using data from 2000, and Table 5.7 presents analogous equations for relative demand for LPNs (as a share of total licensed nurse employment).  The tables are organized in the same way as Tables 5.4 and 5.5.  As seen in the first two rows of Table 5.6, hospitals in States with restrictive scopes of LPN practice tend to have lower employment of LPNs.  However, once the potential endogeneity of wages and scope of practice are addressed using instrumental variables, the relationship is no longer statistically significant.  A similar pattern holds for the specificity of scope of practice.  However, Table 5.7 demonstrates that as the scope of practice of LPNs becomes more restrictive, the demand for LPNs falls relative to the demand for all licensed nurses, even when controlling for the endogeneity of scope of practice.

There are some differences in the effects of other explanatory variables between the cross-section and longitudinal results.  LPN wages continue to have a negative effect on demand for LPNs, but this effect is not significant when instrumental variables are used to control for the endogeneity of LPN wages.  RN and aide wages are not significantly associated with LPN demand, except in the uninstrumented equations.  In these equations, higher aide wages are associated with greater demand for LPNs.  As seen in Table 5.7, wages have little to no effect on relative demand for LPNs.

Table 5.6:  Estimates of Demand for Licensed Practical/Vocational Nurses in U.S. General Acute Care Hospitals, 2000

Higher patient volumes increase the demand for LPNs, and this relationship is larger in magnitude in the cross-section than it was in the longitudinal data.  However, higher volumes reduce the relative demand for LPNs in the cross section, suggesting that larger hospitals demand fewer LPNs, all other things held equal.  LPN demand is negatively associated with length of stay, but relative demand for LPN rises with length of stay, again suggesting that the acuity of patients declines with length of stay.  Thus, both overall demand for nursing staff and demand for RNs drops as length of stay rises.  Relative demand for LPNs falls as the case mix of patients rises.

Table 5.7:  Estimates of Demand for Licensed Practical/Vocational Nurses in U.S. General Acute Care Hospitals, 2000

As in the longitudinal models, hospitals with a higher share of Medicaid inpatient days have greater demand for LPNs.  District and government hospitals demand more LPNs both in absolute and relative terms.  The only cross-sectional effect of managed care is that as the number of HMOs operating in a county rises, demand for LPNs falls. Relative demand for LPNs also falls as the number of HMOs and HMO penetration rise.  However, neither of these findings is observed when instrumental variables are used to account for the potential endogeneity of wages.  County per capita income continues to be negatively associated with LPN demand and relative LPN demand.

The Demand for LPNs by Long-Term Care Facilities

The above analysis demonstrates that restrictive scopes of LPN practice reduce hospital demand for LPNs, both in absolute terms and relative to total licensed nurse demand.  How does scope of practice affect demand for LPNs by nursing homes?  To answer this question, we turned to Medicare’s Online Survey, Certification, and Reporting System (OSCAR).  These data provide information about long-term care facilities, including staffing, limitations in the activities of daily living of residents (ADLs), the share of residents insured by Medicaid, and facility number of beds.  To examine the factors that affect long-term care facility demand for LPNs, we estimate regression equations similar to those used to study hospital demand for LPNs.

The dependent variables in our analysis are LPN hours per facility resident day, and LPN hours as a share of licensed nurse hours per resident day.  We anticipate that demand for LPNs will be a function of the scope of practice, measured as above; the number of beds in the facility; the resident case mix index; State Medicaid reimbursement rates; nurse wages; the share of residents on Medicaid; whether the State uses a case mix reimbursement method; the facility’s ownership, including profit status, and chain membership; whether the nursing facility is based in a hospital; whether is certified to accept patients insured by Medicaid, Medicare, or both; and the concentration of nursing homes in the market, measured as the Herfindahl index.  All data are from 2002, except for RN and LPN wages, which are measured as in the hospital demand models.

Previous research has demonstrated that many of the variables that affect demand for LPNs are endogenous (Harrington & Swan, 2003; Zinn, 1993) .  Specifically, the case mix of residents is simultaneously determined with LPN demand, and State Medicaid rates are endogenous.  In order to estimate the demand equations, we implemented instrumental variables techniques to address this endogeneity.  The instrumental variables for case mix, which is measured as the dependency of residents in activities of daily life, are the proportion of the MSA population aged 65 and over, the percentage of females in the labor force, personal per capita income, and the percent excess beds in the county.  The instrumental variables for State Medicaid rates are the proportion of the MSA population aged 65 and over, personal per capita income, whether the governor is Democratic, and whether the legislature and/or governorship are split between political parties.  Wages also are endogenous, and we use RNs per 100,000 population, the share of the population over age 65, percentage of females in the labor force, and personal income per capita as instrumental variables.  Finally, we assume that scope of practice regulations may be endogenous with demand for LPNs, and we use the same instrumental variables as in the hospital equations.

Tables 5.8 and 5.9 present LPN demand equations for long-term care facilities.  In Table 5.8, the dependent variable is LPN hours per resident day, and in Table 5.9 it is LPN hours divided by total licensed nursing hours per resident day.  The first two columns of both tables present an equation in which instrumental variables are used for Medicaid reimbursement rates, case mix, and scope of practice.  The second two columns include instrumental variables for LPN wages as well.

Table 5.8:  Estimates of Demand for Licensed Practical/Vocational Nurses in U.S. Long-Term Care Facilities, 2002

As seen in Table 5.8, long-term care facilities located in States with more restrictive and specific scopes of LPN practice demand fewer LPNs.  This effect is statistically significant in both the level of demand and the relative demand equations.  This result persists in the equations for relative LPN demand, although the relationship is not statistically significant when instrumental variables are used for relative wages.  Thus, as with hospitals, it appears that the restrictiveness of the LPN scope of practice has an important effect on the demand for LPNs by long-term care facilities.

Other factors affect long-term care facility demand for LPNs.  As the market wage rises, demand for LPNs falls, as expected.  However, in the relative demand equation, the opposite relationship is found: higher LPN wages, relative to RN wages, are associated with increased demand for LPNs relative to RNs.  We have not been able to explain this contrary finding.  It may be that the higher wages for LPNs are related to having additional training and certification.  That would also explain the increase in demand for LPNs.  If the LPNs have acquired higher skills, they are more attractive to hospitals than RNs, even though they have a higher wage.  They can perform more complex activities and they cost less than RNs.

Table 5.9:  Estimates of Relative Demand for Licensed Practical/Vocational Nurses in U.S. Long-Term Care Facilities, 2002

Facilities with more beds demand fewer LPNs per resident day, but demand more LPNs relative to RNs.  These figures suggest there are economies of scale in providing long-term care.  The absolute and relative demand for LPNs rises with the ADL dependency of residents.  A higher share of Medicaid residents is associated with lower demand for LPNs per resident day, but with a greater share of LPNs relative to RNs.  In sum, these coefficients suggest that as the share of Medicaid residents rises, long-term care facilities rely more on less-skilled licensed nursing personnel.  Facilities that have certification for both Medicare and Medicaid patients demand fewer LPNs overall and also fewer LPNs relative to RNs.

Payment rates for long-term care facilities have significant effects on demand for LPNs.  Increases in the Medicaid reimbursement rate result in higher LPN demand, and also lower LPN demand relative to RN demand, probably because facilities can better afford more skilled nurses when reimbursement rates are higher.  Case mix reimbursement methods are associated with lower demand for LPNs and lower LPN/RN ratios.

The ownership of the long-term care facility affects demand for LPNs.  For-profit facilities demand more LPNs relative to RNs, although the absolute level of demand for LPNs is not associated with profit status.  This suggests that for-profit facilities employ fewer RNs than do other facilities.  Chain-owned long-term care facilities demand more LPNs, and also demand fewer LPNs relative to RNs (indicating that they demand more RNs). 

Finally, LPN demand is affected by market characteristics.  Facilities in markets where there is less competition between facilities have lower demand for LPNs, and competition has no effect on the LPN to RN mix.  This finding suggests that competition between long-term care facilities may increase quality of care, because the facilities compete for patients by hiring more licensed staff. 

The earnings of LPNs

In general, the wages of LPNs result from the intersection of market supply and market demand.  As demand rises relative to supply, wages will rise.  This wage inflation will, in turn, increase the supply of LPNs and reduce demand for LPNs.  These movements bring the labor market into balance.  Thus, it is difficult to examine the earnings of LPNs separately from demand and supply.  The above sections on demand and supply explore these relationships.  In this section, we present the results from the first-stage regression used to obtain predicted values of wage.  Recall that these predicted values were used in our supply regressions.

We use Current Population Survey data from 1994 through 2001 to estimate the wage of each LPN, controlling for demographic, market, and job characteristics.  We omit family characteristics because in theory family characteristics should not affect the human capital of workers.  The yearly dummy variables included in the equation control for secular changes in wages nationwide, such as those that result from economy-wide inflation.  We also include the number of physicians per 100,000 people and the average manufacturing wage in the LPN’s State of residence as explanatory variables in the wage equation.  These two variables serve as instruments in our two-stage least squares regressions of the supply of LPNs.  The dependent variable is created for each LPN in our sample by dividing their usual weekly earnings (before deductions) by their usual hours of work per week, and is adjusted for inflation.

Table 5.10 presents ordinary least squares regression results for LPN wages.  Notably, the estimated coefficients on the two variables serving as instruments are positive and statistically significant, and imply that LPN wages increase as the Statewide average manufacturing wage and the number of physicians relative to the population increase.   

Demographic characteristics affect the wages received by LPNs.  Male LPNs earn higher wages than do female LPNs, and LPNs with a college degree have higher wages than do those who do not have a college degree.  Furthermore, the wage differential is greater for LPNs with at least a 4-year degree (i.e., bachelor’s degree or higher). LPNs who are not citizens earn lower wages than US-born LPNs, though this result is only statistically significant at a higher p-value.  Age has a significant effect on LPN wages.  Wages rise with age until age 52, after which time they decline.  This finding suggests that, adjusted for inflation, LPN wages do not progress consistently with potential experience. 

Table 5.10:  Regression Results for Log of LPN/LPN Earnings Per Hour

*p < 0.10
**p < 0.05

Source: Current Population Survey Outgoing Rotation Group Files, 1994-2001

Notes: (1) the dependent variable is created by dividing usual weekly earning by usual hours of work per week; (2) standard errors (in parentheses) are estimated using the "robust" option in Stata; and (3) all regressions include a constant.

Market characteristics are important predictors of wages.  Compared to those living in the Western region of the U.S., LPNs residing in the Midwest and South earn lower wages.  Also, LPNs in rural areas earn lower wages than do their urban-dwelling counterparts.  The more populated an urban area is, the higher the wage relative to wages in rural areas.  This may reflect higher costs of living in cities, especially in cities of 2.5 million or more. 

Employment setting has some effect on the wages of LPNs.  LPNs working in physician offices and private households have lower wages than do LPNs working in long-term care settings.  Finally, wages in 1996-1998 and in 2000 were lower compared to wages in 1994.  Thus, there is some evidence that inflation adjusted wages for LPNs declined during our sample time period.

Conclusions about Supply and Demand of LPNs

The supply of LPNs is affected by characteristics common to other professions.  Male LPNs are not more likely to be employed, but they tend to work more hours and are more likely to be employed full time than are females.  LPNs reduce their participation in the labor force after some age, the probability of employment drops after age 40 or 50 (depending on how the model is specified) and the probability of full-time work declines after LPNs reach their early forties.  Black LPNs are more likely to work full time and tend to work more hours than white LPNs.  Likewise for LPNs living in the South, relative to those in the Western States.  Furthermore, Midwestern LPNs are more likely to be employed than their counterparts in the West. LPNs who are foreign-born are less likely to be employed, but work more hours than do LPNs who are US-born. LPNs with children in their households tend to work fewer hours.  Finally, as LPN wages rise, LPNs are more likely to work full-time. LPNs enjoy higher earnings with experience, until they are in their early 50s. They also have higher wages if they have a college degree, especially if they have a 4-year or graduate degree.  LPN earnings vary by employment sector; the highest earnings are enjoyed by LPNs working in personnel supply services (such as temporary and home health agencies), hospitals, and long-term care facilities, and the lowest earnings are received by those working in private households and physician offices.

The demand for LPNs varies with LPN wages, wages of other nursing personnel, patient volumes, case mix of patients, and market characteristics.  In general, demand for LPNs drops as LPN wages rise, and demand for LPNs rises as wages of RNs rise.  Higher patient volumes are associated with higher demand for LPNs.  In hospitals, rising patient acuity reduces demand for LPNs, while demand increases in long-term care facilities with higher ADL dependency of patients.

Hospital demand for LPN rises as the share of patients insured by Medicaid increases.  Long-term care facility demand for LPNs declines as the share of residents insured by Medicaid rises, and demand for RNs also declines.  Thus, both types of employers shift their labor demand to the least skilled nursing personnel possible when Medicaid is more prominent in the patient mix.  Increases in the Medicaid reimbursement rate cause long-term care facilities to demand more skilled nurses.

Finally, the scope of practice of LPNs affects demand for them.  Restrictive scopes of practice have a significant, negative effect on hospital and long-term care facility demand for LPNs.  Demand for LPNs also is lower in States with more specific scopes of practice.  If States want to encourage the employment of LPNs as substitutes for RNs, they can liberalize the scope of practice of LPNs to achieve this goal.  However, because there is little research indicating whether these skill mix changes would have negative effects on quality of care, policymakers should tread carefully before moving in this direction.

References

American Hospital Association. (1999). The AHA Annual Survey Database Fiscal Year 1997 Documentation. Chicago, IL: Health Forum.

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^[1] We refer to these governmental authorities as “boards” in the remainder of this chapter.

^[2] The explanatory variables in the wage equation are dummy variables for male, citizenship status, highest education attained, race, work setting, type of employer, region, city size, and year in sample, as well as age, age squared, and the percentage of licensed practical nurses unionized in state of residence.  The average manufacturing wage and number of physicians per 100,000 people in the LPN’s state of residence serve as instrumental variables.

¹ We assume that the market wages for registered nurses and nurse aides are exogenous in our model of hospital demand for licensed practical nurses.  While individual hospitals’ wages to nurses may indeed be simultaneously determined with demand, market wages should not be influenced significantly by any single hospital’s demand for LPNs.

² Average ages were computed in the same way as were market wages and merged to each observation in the same fashion.