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The Effect of an Employer Health Insurance Mandate on Health Insurance Coverage and the Demand for Labor: Evidence from Hawaii

  • Thomas C. Buchmueller
  • John DiNardo
  • Robert G. Valletta

We examine the effects of the most durable employer health insurance mandate in the United States, Hawaii's Prepaid Health Care Act, using Current Population Survey data covering the years 1979 to 2005. Relying on a variation of the classical Fisher permutation test applied across states, we find that Hawaii's law increased insurance coverage over time for worker groups with low rates of coverage in the voluntary market. We find no statistically significant support for the hypothesis that the mandate reduced wages and employment probabilities. Instead, its primary detectable effect was an increased reliance on exempt part-time workers. (JEL G22, I18, J23, J32)

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File URL: http://www.aeaweb.org/articles.php?doi=10.1257/pol.3.4.25
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File URL: http://www.aeaweb.org/aej/pol/app/2009-0154_app.pdf
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Article provided by American Economic Association in its journal American Economic Journal: Economic Policy.

Volume (Year): 3 (2011)
Issue (Month): 4 (November)
Pages: 25-51

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Handle: RePEc:aea:aejpol:v:3:y:2011:i:4:p:25-51
Note: DOI: 10.1257/pol.3.4.25
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  1. Richard V. Burkhauser & Kosali I. Simon, 2007. "Who Gets What from Employer Pay or Play Mandates?," NBER Working Papers 13578, National Bureau of Economic Research, Inc.
  2. Katherine Baicker & Helen Levy, 2007. "Employer Health Insurance Mandates and the Risk of Unemployment," NBER Working Papers 13528, National Bureau of Economic Research, Inc.
  3. Thomas C. Buchmueller & John Dinardo & Robert G. Valletta, 2002. "Union Effects on Health Insurance Provision and Coverage in the United States," ILR Review, Cornell University, ILR School, vol. 55(4), pages 610-627, July.
  4. Thomas C. Buchmueller & John DiNardo, 2001. "Union Effects on Health Insurance Provision and Coverage in the United States," NBER Working Papers 8238, National Bureau of Economic Research, Inc.
  5. Moulton, Brent R, 1990. "An Illustration of a Pitfall in Estimating the Effects of Aggregate Variables on Micro Unit," The Review of Economics and Statistics, MIT Press, vol. 72(2), pages 334-38, May.
  6. Sang-Hyop Lee & Gerard Russo & Lawrence H. Nitz & Abdul Jabbar, 2005. "The Effect of Mandatory Employer-Sponsored Insurance (ESI) on Health Insurance Coverage and Labor Force Utilization in Hawaii: Evidence from the Current Population Survey (CPS) 1994-2004," Working Papers 200512, University of Hawaii at Manoa, Department of Economics.
  7. Robert Kaestner, 1996. "The effect of government-mandated benefits on youth unemployment," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 50(1), pages 122-142, October.
  8. 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..
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  13. Alberto Abadie & Alexis Diamond & Jens Hainmueller, 2007. "Synthetic Control Methods for Comparative Case Studies: Estimating the Effect of California's Tobacco Control Program," NBER Technical Working Papers 0335, National Bureau of Economic Research, Inc.
  14. Ai, Chunrong & Norton, Edward C., 2003. "Interaction terms in logit and probit models," Economics Letters, Elsevier, vol. 80(1), pages 123-129, July.
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  16. David H. Autor & Lawrence F. Katz & Melissa S. Kearney, 2008. "Trends in U.S. Wage Inequality: Revising the Revisionists," The Review of Economics and Statistics, MIT Press, vol. 90(2), pages 300-323, May.
  17. Summers, Lawrence H, 1989. "Some Simple Economics of Mandated Benefits," American Economic Review, American Economic Association, vol. 79(2), pages 177-83, May.
  18. Abadie, Alberto & Diamond, Alexis & Hainmueller, Jens, 2010. "Synthetic Control Methods for Comparative Case Studies: Estimating the Effect of California’s Tobacco Control Program," Journal of the American Statistical Association, American Statistical Association, vol. 105(490), pages 493-505.
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  20. Gruber, Jonathan, 1994. "The Incidence of Mandated Maternity Benefits," American Economic Review, American Economic Association, vol. 84(3), pages 622-41, June.
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