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The Effect of Mandatory Employer-Sponsored Insurance (ESI) on Health Insurance Coverage and Labor Force Utilization in Hawaii: Evidence from the Current Population Survey (CPS) 1994-2004

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Author Info
Sang-Hyop Lee () (Department of Economics, University of Hawaii at Manoa)
Gerard Russo (Department of Economics, University of Hawaii at Manoa)
Lawrence H. Nitz (Department of Political Science, University of Hawaii at Manoa)
Abdul Jabbar (Department of Economics, University of Hawaii at Manoa)
Abstract

Using data from the Current Population Surveys, we examine the impact of Hawaii’s mandatory employer-sponsored insurance on health insurance coverage and employment structure in Hawaii. We find empirical evidence of three phenomena. First, private employer-sponsored insurance coverage for full-time workers (more than 20 hours per week) is more prevalent in Hawaii, other things held constant, than in other states and the U.S. as a whole. Second, there is avoidance of the employer-mandate in Hawaii by skirting the 20 hour rule, which changes the both the distribution of employment and the distribution of employment-based insurance coverage by hours worked. Third, Hawaii workers who match with part-time jobs without employer-sponsored health insurance obtain publicly provided health insurance or military coverage with higher probability than their counterparts elsewhere in the U.S. These results suggest that employer mandates induce both higher rates of coverage and labor market sorting.

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File URL: http://www.economics.hawaii.edu/research/workingpapers/WP_05-12.pdf
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File Function: First version, 2005
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Publisher Info
Paper provided by University of Hawaii at Manoa, Department of Economics in its series Working Papers with number 200512.

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Length: 41 pages
Date of creation: 2005
Date of revision:
Handle: RePEc:hai:wpaper:200512

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Related research
Keywords: health insurance; employee sponsored insurance; Hawaii's labor market;

Find related papers by JEL classification:
I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Private Pensions

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    Other versions:
  2. David M. Cutler & Brigitte C. Madrian, 1998. "Labor Market Responses to Rising Health Insurance Costs: Evidence on Hours Worked," RAND Journal of Economics, The RAND Corporation, vol. 29(3), pages 509-530, Autumn. [Downloadable!] (restricted)
    Other versions:
  3. Janet Currie & Brigitte C. Madrian, 1998. "Health, Health Insurance and the Labor Market," JCPR Working Papers 27, Northwestern University/University of Chicago Joint Center for Poverty Research.
    Other versions:
  4. Gruber, Jonathan & Poterba, James, 1994. "Tax Incentives and the Decision to Purchase Health Insurance: Evidence from the Self-Employed," The Quarterly Journal of Economics, MIT Press, vol. 109(3), pages 701-33, August. [Downloadable!] (restricted)
    Other versions:
  5. Buchmueller, Thomas C, 1999. "Fringe Benefits and the Demand for Part-Time Workers," Applied Economics, Taylor and Francis Journals, vol. 31(5), pages 551-63, May. [Downloadable!] (restricted)
  6. Jonathan Gruber, 2002. "Taxes and Health Insurance," NBER Chapters, in: Tax Policy and the Economy, Volume 16, pages 37-66 National Bureau of Economic Research, Inc. [Downloadable!]
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  7. Feldstein, Martin & Friedman, Bernard, 1977. "Tax subsidies, the rational demand for insurance and the health care crisis," Journal of Public Economics, Elsevier, vol. 7(2), pages 155-178, April. [Downloadable!] (restricted)
  8. Norman K. Thurston, 1997. "Labor market effects of Hawaii's mandatory employer-provided health insurance," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 51(1), pages 117-135, October.
  9. Frank A. Scott & Mark C. Berger & Dan A. Black, 1989. "Effects of the tax treatment of fringe benefits on labor market segmentation," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 42(2), pages 216-229, January.
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  11. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-38, May. [Downloadable!] (restricted)
  12. Mark Montgomery & James Cosgrove, 1993. "The effect of employee benefits on the demand for part-time workers," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 47(1), pages 87-98, October.
  13. John C. Ham & Lara D. Shore-Sheppard, 2005. "Did expanding Medicaid affect welfare participation?," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 58(3), pages 452-470, April. [Downloadable!] (restricted)
    Other versions:
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