Government Regulation and the Quality of Healthcare: Evidence from Minimum Staffing Legislation for Nursing Homes

This paper investigates the effect of a regulation mandating a minimum nurse-staffing level on the quality of healthcare in nursing homes. To comply with the regulation, firms increase employment of nurses in proportion to the gap between their initial staffing level and the legislated minimum threshold. If higher nurse staffing causes better quality, then the changes in quality outcomes should mirror these changes. Despite inducing increases in nurse aide hours of 10 percent on average and up to 30 percent for some firms, I find no impact of the regulation on patient outcomes or overall facility quality.