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Taxes, Health Insurance and Women's Self-Employment

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  • Velamuri, Malathi

Abstract

I examine whether the availability of health coverage through the spouse's health plan influences a married woman's decision to become self-employed. The Tax Reform Act of 1986 (TRA86) introduced a tax subsidy for the self-employed to purchase their own health insurance. I test whether this `natural' experiment induced more women without spousal health insurance coverage to select into self-employment. The difference-in-difference estimates based on an analysis of employed women indicate that the incidence of self-employment among women who did not enjoy spousal health bene�ts rose signi�cantly - between 14% and 25% - in the post-TRA86 period, while a multinomial speci�cation based on a sample of both employed and non-employed women suggests that the increase was around 9%.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 50474.

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Date of creation: 2009
Date of revision: Apr 2012
Publication status: Published in Contemporary Economic Policy 2.30(2012): pp. 162-177
Handle: RePEc:pra:mprapa:50474

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Keywords: Health Insurance; Self-Employment;

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Cited by:
  1. Gulcin Gumus & Tracy Regan, 2007. "Self-Employment and the Role of Health Insurance," Working Papers 0910, University of Miami, Department of Economics.
  2. Fairlie, Robert W. & Kapur, Kanika & Gates, Susan, 2010. "Is Employer-Based Health Insurance a Barrier to Entrepreneurship?," IZA Discussion Papers 5203, Institute for the Study of Labor (IZA).

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