Household Search and Health Insurance Coverage
AbstractHealth insurance in the United States is typically acquired through an employer-sponsored program. Often an employee offerred employer-provided health insurance has the option to extend coverage to their spouse and dependents. We investigate the implications of the “publicness” of health insurance coverage for the labor market careers of spouses. The theoretical innovations in the paper are to extend the standard partial-partial equilibrium labor market search model to a multiple searcher setting with the inclusion of multi-attribute job offers, with some of the attributes treated as public goods within the household. The model is estimated using data from the Survey of Income and Program Participation (SIPP) using a Method of Simulated Moments (MSM) estimator. We demonstrate how previous estimates of the marginal willingness to pay (MWP) for health insurance based on cross-sectional linear regression estimators may be seriously biased due to the presence of dynamic selection effects and misspecification of the decision-making unit.
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Bibliographic InfoPaper provided by Collegio Carlo Alberto in its series Carlo Alberto Notebooks with number 56.
Length: 39 pages
Date of creation: 2007
Date of revision:
Household Search; Health Insurance Provision; Marginal Willingness to Pay;
Other versions of this item:
- D1 - Microeconomics - - Household Behavior
- J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
- J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-10-27 (All new papers)
- NEP-HEA-2007-10-27 (Health Economics)
- NEP-IAS-2007-10-27 (Insurance Economics)
- NEP-LAB-2007-10-27 (Labour Economics)
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