Decreasing Opportunities for Low-Wage Workers: The Role of the Nondiscrimination Law for Employer-Provided Health Insurance
AbstractAs of 1978, the favorable tax treatment of fringe benefits, including health insurance, has been regulated via a nondiscrimination clause such that low-wage, full-time workers must be offered health insurance (and other benefits) that are offered to higher-wage workers by the firm. Part-time workers may be excluded from coverage, however, creating incentives for firms to hire some types of workers part time to deny them coverage. We hypothesize that firms will hire fewer workers whose relative costs have increased, that is, low-wage workers. These workers will be less likely to work for firms that offer coverage, and those that do will be more likely to work part time without being eligible for the firm’s health insurance benefits. We use the 1988 and 1993 Employee Benefits Supplements to the Current Population Surveys and an employer premium imputation to examine these hypotheses. Both the descriptive and multivariate analysis are consistent with our hypotheses. We predict the probability of working for a firm that offers health insurance to decrease as premiums increase for both high- and low-wage workers. An increase in the premium is also associated with a decrease in the probability of part-time work, but an even greater decrease in the joint probability of part-time work with eligibility for health insurance.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University of Wisconsin Institute for Research on Poverty in its series Institute for Research on Poverty Discussion Papers with number 1124-97.
Date of creation:
Date of revision:
Contact details of provider:
Postal: 3412 Social Science Building, 1180 Observatory Drive, Madison, WI 53706
Phone: (608) 262-6358
Fax: (608) 265-3119
Web page: http://www.ssc.wisc.edu/irp/dp/dplist.htm
More information through EDIRC
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.:
- Jonathan Gruber & Alan B. Krueger, 1990.
"The Incidence of Mandated Employer-Provided Insurance: Lessons from Workers' Compensation Insurance,"
NBER Working Papers
3557, National Bureau of Economic Research, Inc.
- Jonathan Gruber & Alan B. Krueger, 1991. "The Incidence of Mandated Employer-Provided Insurance: Lessons from Workers' Compensation Insurance," NBER Chapters, in: Tax Policy and the Economy, Volume 5, pages 111-144 National Bureau of Economic Research, Inc.
- Jonathan Gruber & Alan Krueger, 1990. "The Incidence of Mandated Employer-Provided Insurance: Lessons from Workers' Compensations Insurance," Working Papers 659, Princeton University, Department of Economics, Industrial Relations Section..
- repec:fth:coluec:452 is not listed on IDEAS
- Feldstein, Martin S, 1973. "The Welfare Loss of Excess Health Insurance," Journal of Political Economy, University of Chicago Press, vol. 81(2), pages 251-80, Part I, M.
- Dickens, William T & Lundberg, Shelly J, 1993.
"Hours Restrictions and Labor Supply,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 34(1), pages 169-92, February.
- Paul Krugman & Robert Lawrence, 1993. "Trade, Jobs, and Wages," NBER Working Papers 4478, National Bureau of Economic Research, Inc.
- Mark Montgomery & James Cosgrove, 1993. "The effect of employee benefits on the demand for part-time workers," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 47(1), pages 87-98, October.
- Bryan E. Dowd & Roger Feldman, 1987. "Voluntary Reduction in Health Insurance Coverage: A Theoretical Analysis," Eastern Economic Journal, Eastern Economic Association, vol. 13(3), pages 215-232, Jul-Sep.
- Jane Sneddon Little, 1995. "The impact of employer payments for health insurance and social security on the premium for education and earnings inequality," New England Economic Review, Federal Reserve Bank of Boston, issue May, pages 25-40.
- 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.
- David M. Cutler & Brigitte C. Madrian, 1996. "Labor Market Responses to Rising Health Insurance Costs: Evidence on Hours Worked," NBER Working Papers 5525, National Bureau of Economic Research, Inc.
- Murphy, Kevin M & Welch, Finis, 1992. "The Structure of Wages," The Quarterly Journal of Economics, MIT Press, vol. 107(1), pages 285-326, February.
- Gary Burtless, 1995. "International Trade and the Rise in Earnings Inequality," Journal of Economic Literature, American Economic Association, vol. 33(2), pages 800-816, June.
- Abraham, Katharine G & Taylor, Susan K, 1996.
"Firms' Use of Outside Contractors: Theory and Evidence,"
Journal of Labor Economics,
University of Chicago Press, vol. 14(3), pages 394-424, July.
- Katharine G. Abraham & Susan K. Taylor, 1993. "Firms' Use of Outside Contractors: Theory and Evidence," NBER Working Papers 4468, National Bureau of Economic Research, Inc.
- Pauly, Mark V, 1986. "Taxation, Health Insurance, and Market Failure in the Medical Economy," Journal of Economic Literature, American Economic Association, vol. 24(2), pages 629-75, June.
- Summers, Lawrence H, 1989. "Some Simple Economics of Mandated Benefits," American Economic Review, American Economic Association, vol. 79(2), pages 177-83, May.
- Daniel S. Hamermesh, 1998.
"Changing Inequality in Markets for Workplace Amenities,"
NBER Working Papers
6515, National Bureau of Economic Research, Inc.
- Daniel S. Hamermesh, 1999. "Changing Inequality In Markets For Workplace Amenities," The Quarterly Journal of Economics, MIT Press, vol. 114(4), pages 1085-1123, November.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Thomas Krichel).
If references are entirely missing, you can add them using this form.