Labor Market Implications of Rising Costs of Employer-Provided Health Insurance
AbstractVariation in income tax policies and health insurance costs are shown to be theoretically appropriate instruments to identify endogenous firm wage and benefit offers in a labor supply model. Empirical results show that firms are more likely to provide health insurance benefits in states with high marginal income tax rates and low hospitalization costs. The model implies that over the 1983-1995 period, large increases in health insurance costs and reductions in marginal income tax rates lowered the probability of receiving health insurance benefits from employers by 10 percentage points. This decrease in benefits lowered hours of labor supply by 4-7%.
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Bibliographic InfoPaper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 10016.
Date of creation: 02 Apr 2002
Date of revision:
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Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
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Find related papers by JEL classification:
- I00 - Health, Education, and Welfare - - General - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2002-09-28 (All new papers)
- NEP-HEA-2002-09-21 (Health Economics)
- NEP-IAS-2002-09-11 (Insurance Economics)
- NEP-LAB-2002-09-28 (Labour Economics)
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