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The Labor Market Effects of Rising Health Insurance Premiums

Author

Listed:
  • 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)

Abstract

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%.

Suggested Citation

  • Katherine Baicker & Amitabh Chandra, 2006. "The Labor Market Effects of Rising Health Insurance Premiums," Journal of Labor Economics, University of Chicago Press, vol. 24(3), pages 609-634, July.
  • Handle: RePEc:ucp:jlabec:v:24:y:2006:i:3:p:609-634
    DOI: 10.1086/505049
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • J0 - Labor and Demographic Economics - - General
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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