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The Labor Market Effects of National Health Insurance : Evidence From Taiwan

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Abstract

This paper investigates the impacts of national health insurance on the labor market, by considering the case of Taiwan, which implemented national health insurance in March 1995. Taiwan’s national health insurance is financed by premiums, which are proportional to an employee’s salary. These premiums may introduce distortions to the labor market. Based on repeated cross-sections of individual data we find that, on average, private sector employees’ work hours declined relative to their public sector counterparts, while their relative wage rates were almost unchanged with the introduction of national health insurance. The results suggest that neither private sector employers nor their employees were able to shift their premium burden to each other.

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Paper provided by Institute of Economics, Academia Sinica, Taipei, Taiwan in its series IEAS Working Paper : academic research with number 07-A001.

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Length: 46 pages
Date of creation: Jan 2007
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Handle: RePEc:sin:wpaper:07-a001

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Keywords: National Health Insurance; Labor Supply; Wage Rate; Difference-in-Difference;

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  17. Vella, Francis & Verbeek, Marno, 1999. "Estimating and Interpreting Models with Endogenous Treatment Effects," Journal of Business & Economic Statistics, American Statistical Association, American Statistical Association, vol. 17(4), pages 473-78, October.
  18. Lee, Lung-Fei, 1983. "Generalized Econometric Models with Selectivity," Econometrica, Econometric Society, Econometric Society, vol. 51(2), pages 507-12, March.
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