Worker Sorting, Taxes and Health Insurance Coverage
AbstractIf firms hire heterogeneous workers but must offer all workers insurance bene?fits under similar terms, then in equilibrium, some firms offer free health insurance, some require an employee premium payment and some do not offer insurance. Making the employee contribution pre-tax lowers the cost to workers of a given employee premium and encourages more firms to charge. This increases the offer rate, lowers the take-up rate, increases (decreases) coverage among high (low) demand groups, with an indeterminate overall effect. This pattern is consistent with trends in the U.S. economy following the creation of section 125 plans.
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Bibliographic InfoPaper provided by Boston University - Department of Economics in its series Boston University - Department of Economics - Working Papers Series with number WP2010-015.
Length: 39 pages
Date of creation: Jan 2010
Date of revision:
Other versions of this item:
- Kevin Lang & Hong Kang, 2007. "Worker Sorting, Taxes and Health Insurance Coverage," NBER Working Papers 13066, National Bureau of Economic Research, Inc.
- Kevin Lang & Hong Kang, 2005. "Worker Sorting, Taxes and Health Insurance Coverage," Boston University - Department of Economics - Working Papers Series WP2005-011, Boston University - Department of Economics.
- H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
- H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
- I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
- J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
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