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Premium copayments and the trade-off between wages and employer-provided health insurance

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  • Lubotsky, Darren
  • Olson, Craig A.

Abstract

This paper estimates the trade-off between salary and health insurance costs using data on Illinois school teachers between 1991 and 2008 that allow us to address several common empirical challenges in this literature. Teachers paid about 17 percent of the cost of individual health insurance and about 46 percent of the cost of their family members’ plans through premium contributions, but we find no evidence that teachers’ salaries respond to changes in insurance costs. Consistent with a higher willingness to pay for insurance, we find that premium contributions are higher in districts that employ a higher-tenured workforce. We find no evidence that school districts respond to higher health insurance costs by reducing the number of teachers.

Suggested Citation

  • Lubotsky, Darren & Olson, Craig A., 2015. "Premium copayments and the trade-off between wages and employer-provided health insurance," Journal of Health Economics, Elsevier, vol. 44(C), pages 63-79.
  • Handle: RePEc:eee:jhecon:v:44:y:2015:i:c:p:63-79
    DOI: 10.1016/j.jhealeco.2015.08.006
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    References listed on IDEAS

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    More about this item

    Keywords

    Employer-provided health insurance; Premium contributions; Compensating wage differences; Public school teachers;

    JEL classification:

    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • I2 - Health, Education, and Welfare - - Education
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions

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