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The Effect of an Employer Health Insurance Mandate on Health Insurance Coverage and the Demand for Labor: Evidence from Hawaii

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Author Info

  • Thomas C. Buchmueller
  • John DiNardo
  • Robert G. Valletta

Abstract

We examine the effects of the most durable employer health insurance mandate in the United States, Hawaii's Prepaid Health Care Act, using Current Population Survey data covering the years 1979 to 2005. Relying on a variation of the classical Fisher permutation test applied across states, we find that Hawaii's law increased insurance coverage over time for worker groups with low rates of coverage in the voluntary market. We find no statistically significant support for the hypothesis that the mandate reduced wages and employment probabilities. Instead, its primary detectable effect was an increased reliance on exempt part-time workers. (JEL G22, I18, J23, J32)

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File URL: http://www.aeaweb.org/articles.php?doi=10.1257/pol.3.4.25
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File URL: http://www.aeaweb.org/aej/pol/app/2009-0154_app.pdf
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Bibliographic Info

Article provided by American Economic Association in its journal American Economic Journal: Economic Policy.

Volume (Year): 3 (2011)
Issue (Month): 4 (November)
Pages: 25-51

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Handle: RePEc:aea:aejpol:v:3:y:2011:i:4:p:25-51

Note: DOI: 10.1257/pol.3.4.25
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References

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  1. Jonathan Gruber & Alan B. Krueger, 1991. "The Incidence of Mandated Employer-Provided Insurance: Lessons from Workers' Compensation Insurance," NBER Chapters, in: Tax Policy and the Economy, Volume 5, pages 111-144 National Bureau of Economic Research, Inc.
  2. Katherine Baicker & Helen Levy, 2007. "Employer Health Insurance Mandates and the Risk of Unemployment," NBER Working Papers 13528, National Bureau of Economic Research, Inc.
  3. Ben B. Hansen, 2008. "The prognostic analogue of the propensity score," Biometrika, Biometrika Trust, vol. 95(2), pages 481-488.
  4. Moulton, Brent R, 1990. "An Illustration of a Pitfall in Estimating the Effects of Aggregate Variables on Micro Unit," The Review of Economics and Statistics, MIT Press, vol. 72(2), pages 334-38, May.
  5. Richard V. Burkhauser & Kosali I. Simon, 2007. "Who Gets What from Employer Pay or Play Mandates?," NBER Working Papers 13578, National Bureau of Economic Research, Inc.
  6. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-in-Differences Estimates?," The Quarterly Journal of Economics, MIT Press, vol. 119(1), pages 249-275, February.
  7. Summers, Lawrence H, 1989. "Some Simple Economics of Mandated Benefits," American Economic Review, American Economic Association, vol. 79(2), pages 177-83, May.
  8. David H. Autor & Lawrence F. Katz & Melissa S. Kearney, 2008. "Trends in U.S. Wage Inequality: Revising the Revisionists," The Review of Economics and Statistics, MIT Press, vol. 90(2), pages 300-323, May.
  9. Sang-Hyop Lee & Gerard Russo & Lawrence H. Nitz & Abdul Jabbar, 2005. "The Effect of Mandatory Employer-Sponsored Insurance (ESI) on Health Insurance Coverage and Labor Force Utilization in Hawaii: Evidence from the Current Population Survey (CPS) 1994-2004," Working Papers 200512, University of Hawaii at Manoa, Department of Economics.
  10. Thomas C. Buchmueller & John DiNardo & Robert G. Valletta, 2002. "Union effects on health insurance provision and coverage in the United States," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 55(4), pages 610-627, July.
  11. Ai, Chunrong & Norton, Edward C., 2003. "Interaction terms in logit and probit models," Economics Letters, Elsevier, vol. 80(1), pages 123-129, July.
  12. Gruber, Jonathan, 1994. "The Incidence of Mandated Maternity Benefits," American Economic Review, American Economic Association, vol. 84(3), pages 622-41, June.
  13. Card, David, 1996. "The Effect of Unions on the Structure of Wages: A Longitudinal Analysis," Econometrica, Econometric Society, vol. 64(4), pages 957-79, July.
  14. Robert Kaestner, 1996. "The effect of government-mandated benefits on youth unemployment," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 50(1), pages 122-142, October.
  15. Stephen G. Donald & Kevin Lang, 2007. "Inference with Difference-in-Differences and Other Panel Data," The Review of Economics and Statistics, MIT Press, vol. 89(2), pages 221-233, May.
  16. Alberto Abadie & Alexis Diamond & Jens Hainmueller, 2007. "Synthetic Control Methods for Comparative Case Studies: Estimating the Effect of California's Tobacco Control Program," NBER Working Papers 12831, National Bureau of Economic Research, Inc.
  17. Jeffrey M. Wooldridge, 2003. "Cluster-Sample Methods in Applied Econometrics," American Economic Review, American Economic Association, vol. 93(2), pages 133-138, May.
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Citations

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Cited by:
  1. Thomas C. Buchmueller & Alan C. Monheit, 2009. "Employer-Sponsored Health Insurance and the Promise of Health Insurance Reform," NBER Working Papers 14839, National Bureau of Economic Research, Inc.
  2. Bohn, Sarah & Lofstrom, Magnus & Raphael, Steven, 2011. "Did the 2007 Legal Arizona Workers Act Reduce the State's Unauthorized Immigrant Population?," IZA Discussion Papers 5682, Institute for the Study of Labor (IZA).
  3. James Bailey, 2013. "Who Pays the High Health Costs of Older Workers? Evidence from Prostate Cancer Screening Mandates," DETU Working Papers 1302, Department of Economics, Temple University.
  4. Rob Valletta & Leila Bengali, 2013. "What’s behind the increase in part-time work?," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, issue aug26.
  5. Carrie Hoverman Colla & William H. Dow & Arindrajit Dube, 2010. "How Do Employers React to A Pay-or-Play Mandate? Early Evidence from San Francisco," NBER Working Papers 16179, National Bureau of Economic Research, Inc.
  6. Carrie H. Colla & William H. Dow & Arindrajit Dube, 2011. "The Labor Market Impact of Employer Health Benefit Mandates: Evidence from San Francisco’s Health Care Security Ordinance," NBER Working Papers 17198, National Bureau of Economic Research, Inc.

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