Tax Subsidies And The Provision Of Health Insurance In Small Firms
AbstractThis paper examines the effects of tax subsidies to employer provided health insurance on the distribution of insurance across firms of different sizes. I present a simple model which shows that the tax subsidies may increase the provision of insurance in smaller firms and hence help equalize the distribution of health benefits across firms. I then test this hypothesis using data in both the United States and Canada. My findings indicate that the subsidies reduce the disparity in coverage levels between large and small firms and promote insurance through the workplace instead of on the private market. These findings imply that the tax subsidies may be distorting the labor market by allowing a number of small firms to offer health insurance.
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Bibliographic InfoPaper provided by University of Toronto, Department of Economics in its series Working Papers with number mstabile-99-01.
Length: 40 pages
Date of creation: 11 Nov 1999
Date of revision:
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Find related papers by JEL classification:
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
- I1 - Health, Education, and Welfare - - Health
This paper has been announced in the following NEP Reports:
- NEP-ALL-2000-01-24 (All new papers)
- NEP-IAS-2000-01-24 (Insurance Economics)
- NEP-PBE-2000-01-24 (Public Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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