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Mandate-based health reform and the labor market: Evidence from the Massachusetts reform

Listed author(s):
  • Kolstad, Jonathan T.
  • Kowalski, Amanda E.

We model the labor market impact of the key provisions of the national and Massachusetts “mandate-based” health reforms: individual mandates, employer mandates, and subsidies. We characterize the compensating differential for employer-sponsored health insurance (ESHI) and the welfare impact of reform in terms of “sufficient statistics.” We compare welfare under mandate-based reform to welfare in a counterfactual world where individuals do not value ESHI. Relying on the Massachusetts reform, we find that jobs with ESHI pay $2812 less annually, somewhat less than the cost of ESHI to employers. Accordingly, the deadweight loss of mandate-based health reform was approximately 8 percent of its potential size.

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File URL: http://www.sciencedirect.com/science/article/pii/S0167629616000278
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Article provided by Elsevier in its journal Journal of Health Economics.

Volume (Year): 47 (2016)
Issue (Month): C ()
Pages: 81-106

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Handle: RePEc:eee:jhecon:v:47:y:2016:i:c:p:81-106
DOI: 10.1016/j.jhealeco.2016.01.010
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505560

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