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Health insurance and job creation by the self-employed

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  • Aparna Mathur

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Abstract

Nearly half of all companies surveyed by the National Federation of Independent Business's Education Foundation reported that health insurance costs were a critical problem. States regulate health insurance by mandating minimum levels of certain benefits as part of policies offered. In this paper, we evaluate the impact of state health insurance mandates on job creation by small firms, using data from the Survey of Income and Program Participation for 1993-95. Results from an ordered probit regression indicate that the greater the number of mandates in a state, the lower the probability that a self-employed person will hire additional people. These results hold when we consider both the sum of mandates as well as a cost weighted measure of the most expensive mandates. The predicted probability of owning a business with at least one employee decreases by nearly 10 percentage points as the number of mandates increases from 0 to 16.

(This abstract was borrowed from another version of this item.)

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File URL: http://hdl.handle.net/10.1007/s11187-008-9164-4
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Bibliographic Info

Article provided by Springer in its journal Small Business Economics.

Volume (Year): 35 (2010)
Issue (Month): 3 (October)
Pages: 299-317

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Handle: RePEc:kap:sbusec:v:35:y:2010:i:3:p:299-317

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Web page: http://www.springerlink.com/link.asp?id=100338

Related research

Keywords: Health mandates; Job creation; Entrepreneurship; Empirical analysis; L26;

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References

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Citations

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Cited by:
  1. José María Millán & Emilio Congregado & Concepción Román, 2010. "Determinants of Self-Employment Dynamics and their Implications on Entrepreneurial Policy Effectiveness," Lecturas de Economía, Universidad de Antioquia, Departamento de Economía, issue 72, pages 45-76.
  2. Millán, Ana & Millán, José María & Román, Concepción & van Stel, André, 2013. "How does employment protection legislation influence hiring and firing decisions by the smallest firms?," Economics Letters, Elsevier, vol. 121(3), pages 444-448.
  3. C. J. Krizan & Adela Luque & Alice Zawacki, 2014. "The Effect Of Employer Health Insurance Offering On The Growth And Survival Of Small Business Prior To The Affordable Care Act," Working Papers 14-22, Center for Economic Studies, U.S. Census Bureau.

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