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Health Insurance and Productivity: Evidence from the Manufacturing Sector

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Author Info

  • Sang Nguyen
  • Alice Zawacki

Abstract

This paper examines the relationship between employer-sponsored offers of health insurance and establishments’ labor productivity. Our empirical work is based on unique plant level data that links the 1997 and 2002 Medical Expenditure Panel Survey-Insurance Component with the 1992, 1997, and 2002 Census of Manufactures. These linked data provide information on employer-provided insurance and productivity. We find that health insurance offers are positively associated with levels of establishments’ labor productivity. These findings hold for all manufacturers as well as those with fewer than 100 employees. Our preliminary results also show a drop in health care costs from the 75th to the 25th percentile would increase the probability of a plant offering insurance by 1.5-2.0 percent in both 1997 and 2002. The results from this paper provide encouraging and new empirical evidence on the benefits employers may reap by offering health insurance to workers.

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File URL: ftp://ftp2.census.gov/ces/wp/2009/CES-WP-09-27.pdf
File Function: First version, 2009
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Bibliographic Info

Paper provided by Center for Economic Studies, U.S. Census Bureau in its series Working Papers with number 09-27.

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Length: 28 pages
Date of creation: Sep 2009
Date of revision:
Handle: RePEc:cen:wpaper:09-27

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Keywords: Employer-provided health insurance; labor productivity; manufacturing industries;

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Cited by:
  1. Lacroix, G; & Brouard M-E;, 2011. "Work Absenteeism Due to a Chronic Disease," Health, Econometrics and Data Group (HEDG) Working Papers, HEDG, c/o Department of Economics, University of York 11/15, HEDG, c/o Department of Economics, University of York.
  2. 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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