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The labor-supply effects of extending health insurance to workers’ partners: The experience of Uruguay

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  • Cecilia Parada

Abstract

In December 2010 Health Insurance in Uruguay was extended to the partners of workers in the formal labor market. This extension may have modified the incentives to participate in the formal and informal labor markets, potentially reducing overall participation or the share of individuals in the formal labor market whose partners were formally employed. Using a difference-in-differences methodology, effects of the Health Insurance expansion are estimated by comparing individuals affected by the policy over time with similar but unaffected individuals. We find negative and statistically significant effects: the policy extension reduces the share of the economically-active population in the formal labor market by 0.95 percentage points and women in formal employment in the private sector by 2.13 percentage points. In addition to these effects, we find significant heterogeneous effects by age, educational level, and the formality conditions of the partners. We also find an effect of the policy on occupation, though of smaller magnitude and not always statistically-significant.

Suggested Citation

  • Cecilia Parada, 2016. "The labor-supply effects of extending health insurance to workers’ partners: The experience of Uruguay," Revista Ecos de Economía, Universidad EAFIT, vol. 20(43), pages 39-64, December.
    • Handle: RePEc:col:000442:015648
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    More about this item

    Keywords

    Labor supply; Work incentives; Health insurance; Intra-household allocations;
    All these keywords.

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination

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