Labor Market Dynamics of the Direct Care Workforce

• In Event: The Direct Care Workforce: Recruitment, Retention, and Labor Market Dynamics

Abstract

Nursing homes provide around-the-clock care to more than 1.2 million Americans each year, most of whom require assistance with activities of daily living. This care is predominantly provided by more than 580,000 direct care workers, the majority of whom are certified nursing assistants (CNAs). Staffing is a critical determinant of nursing home quality, yet the sector faces persistent challenges: low wages, high turnover, and staffing levels that fall below clinical standards in most facilities. With an aging population expected to further increase demand for long-term care, understanding which industries and occupations direct care workers come from, and where they go when they leave, is essential for designing effective recruitment and retention policies.We use the longitudinal structure of the monthly Current Population Survey (CPS) from 2010 through 2025 to track year-over-year transitions into, out of, and within nursing home CNA roles. We supplement this with wage data from the CPS Outgoing Rotation Group and information on non-wage benefits from the Annual Social and Economic Supplement (ASEC) to characterize the quality of jobs that CNAs leave and enter.Three key findings emerge. First, turnover among nursing home CNAs is high, even relative to other low-wage sectors. Only 46 percent of nursing home CNAs remain in that role 12 months later, a retention rate lower than retail (52 percent) and food service (58 percent). High turnover extends to other nursing home staff as well: only 44 percent of RNs and LPNs in nursing homes remain a year later, compared with 75 percent of those working in other industries. Second, worker flows into and out of CNA roles are roughly symmetric across industries, with the most common transitions involving other healthcare settings such as home health, hospitals, and other CNA positions. Transitions to credentialed nursing roles remain rare, consistent with the additional education these positions require. Third, workers who leave nursing home CNA roles experience meaningful improvements in compensation and benefits. Leavers see an average hourly wage increase of $1.72 and move to jobs that are substantially more likely to offer employer-sponsored health insurance and pensions, while entrants into CNA roles typically see small wage decreases and come from jobs with similar or better benefit access.These findings highlight the competitive disadvantage nursing homes face in attracting and retaining direct care workers relative to other sectors. The patterns on turnover and job characteristics suggest that improving wages alone may be insufficient and that multi-pronged policy solutions addressing benefits, scheduling, and working conditions will be necessary to stabilize this essential workforce.

Author

• Karen Shen, Johns Hopkins University
  Presenting Author