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Labor Market Effects of Hawaii'S Mandatory Employer-Provided Health Insurance

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  • Norman K. Thurston

Abstract

The author analyzes how mandatory employer provision of health insurance in Hawaii, which became law in 1974, affected workers' wages, employment, and insurance coverage. Between 1970 and 1990, the Hawaiian industries most affected by the mandate had slower wage growth than other Hawaiian industries, but more rapid wage growth than the same industries in the nation as a whole. The author speculates that the effects of unmeasured economy-wide positive demand shocks eclipsed the wage effects of the law. Hawaii's employment growth exceeded that of the country as a whole, but the percentage of Hawaiian workers employed less than 20 hours per week (and thus exempt from the law) was significantly higher than the national average. Insurance coverage for Hawaiian workers of all classes (including those exempt from the act)—and, indeed, for workers and nonworkers of all ages—significantly exceeded the national average in the early 1990s.

Suggested Citation

  • Norman K. Thurston, 1997. "Labor Market Effects of Hawaii'S Mandatory Employer-Provided Health Insurance," ILR Review, Cornell University, ILR School, vol. 51(1), pages 117-135, October.
    • Handle: RePEc:sae:ilrrev:v:51:y:1997:i:1:p:117-135
    DOI: 10.1177/001979399705100108
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    References listed on IDEAS

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    1. Alan Krueger, 1994. "Observations on Employment-Based Government Mandates, With Particular Reference to Health Insurance," Working Papers 702, Princeton University, Department of Economics, Industrial Relations Section..
    2. Mincer, Jacob, 1976. "Unemployment Effects of Minimum Wages," Journal of Political Economy, University of Chicago Press, vol. 84(4), pages 87-104, August.
    3. Gruber, Jonathan, 1994. "State-mandated benefits and employer-provided health insurance," Journal of Public Economics, Elsevier, vol. 55(3), pages 433-464, November.
    4. Gruber, Jonathan & Hanratty, Maria, 1995. "The Labor-Market Effects of Introducing National Health Insurance: Evidence from Canada," Journal of Business & Economic Statistics, American Statistical Association, vol. 13(2), pages 163-173, April.
    5. Alan B. Krueger, 1994. "Observations on Employment-Based Government Mandates, With Particular Reference to Health Insurance," Working Papers 702, Princeton University, Department of Economics, Industrial Relations Section..
    6. Summers, Lawrence H, 1989. "Some Simple Economics of Mandated Benefits," American Economic Review, American Economic Association, vol. 79(2), pages 177-183, May.
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    Cited by:

    1. Carrie H. Colla & William H. Dow & Arindrajit Dube, 2017. "The Labor-Market Impact of San Francisco's Employer-Benefit Mandate," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 56(1), pages 122-160, January.
    2. Pierre, Aurélie & Jusot, Florence, 2017. "The likely effects of employer-mandated complementary health insurance on health coverage in France," Health Policy, Elsevier, vol. 121(3), pages 321-328.
    3. Brigitte C. Madrian, 2005. "The U.S. health care system and labor markets," Conference Series ; [Proceedings], Federal Reserve Bank of Boston, vol. 50(Jun), pages 137-163.
    4. Katherine Baicker & Helen Levy, 2008. "Employer Health Insurance Mandates and the Risk of Unemployment," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 11(1), pages 109-132, March.
    5. Katerina Sherstyuk & Yoav Wachsman & Gerard Russo, 2007. "Labor Market Effects Of Employer‐Provided Health Insurance," Economic Inquiry, Western Economic Association International, vol. 45(3), pages 538-556, July.
    6. Jonathan Gruber, 1998. "Health Insurance and the Labor Market," NBER Working Papers 6762, National Bureau of Economic Research, Inc.
    7. DeVaro, Jed & Maxwell, Nan L., 2014. "The elusive wage-benefit trade-off: The case of employer-provided health insurance," International Journal of Industrial Organization, Elsevier, vol. 37(C), pages 23-37.
    8. repec:eee:labchp:v:3:y:1999:i:pc:p:3309-3416 is not listed on IDEAS
    9. Jinqi Ye, 2017. "The Effects of State and Federal Mental Health Parity Laws on Working Time," Center for Policy Research Working Papers 200, Center for Policy Research, Maxwell School, Syracuse University.
    10. 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.
    11. Joana Simões de Melo Costa, 2016. "Effects of domestic worker legislation reform in Brazil," Working Papers 149, International Policy Centre for Inclusive Growth.

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