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The Labor Market Effects of Rising Health Insurance Premiums

  • Katherine Baicker

    (University of California, Los Angeles, and the National Bureau of Economic Research)

  • Amitabh Chandra

    (Harvard University, Institute for the Study of Labor, and the National Bureau of Economic Research)

We estimate the effect of rising health insurance premiums on wages, employment, and the distribution of part-time and full-time work using variation in medical malpractice payments driven by the recent "medical malpractice crisis." We estimate that a 10% increase in health insurance premiums reduces the aggregate probability of being employed by 1.2 percentage points, reduces hours worked by 2.4%, and increases the likelihood that a worker is employed only part time by 1.9 percentage points. For workers covered by employer provided health insurance, this increase in premiums results in an offsetting decrease in wages of 2.3%.

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File URL: http://dx.doi.org/10.1086/505049
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Article provided by University of Chicago Press in its journal Journal of Labor Economics.

Volume (Year): 24 (2006)
Issue (Month): 3 (July)
Pages: 609-634

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Handle: RePEc:ucp:jlabec:v:24:y:2006:i:3:p:609-634
Contact details of provider: Web page: http://www.journals.uchicago.edu/JOLE/

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