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Household Search and Health Insurance Coverage

Author

Listed:
  • Matthew Dey
  • Christopher Flinn

Abstract

Health insurance in the United States is typically acquired through an employer-sponsored program. Often an employee offerred employer-provided health insurance has the option to extend coverage to their spouse and dependents. We investigate the implications of the “publicness” of health insurance coverage for the labor market careers of spouses. The theoretical innovations in the paper are to extend the standard partial-partial equilibrium labor market search model to a multiple searcher setting with the inclusion of multi-attribute job offers, with some of the attributes treated as public goods within the household. The model is estimated using data from the Survey of Income and Program Participation (SIPP) using a Method of Simulated Moments (MSM) estimator. We demonstrate how previous estimates of the marginal willingness to pay (MWP) for health insurance based on cross-sectional linear regression estimators may be seriously biased due to the presence of dynamic selection effects and misspecification of the decision-making unit.

Suggested Citation

  • Matthew Dey & Christopher Flinn, 2007. "Household Search and Health Insurance Coverage," Carlo Alberto Notebooks 56, Collegio Carlo Alberto.
    • Handle: RePEc:cca:wpaper:56
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    References listed on IDEAS

    as
    1. Matthew S. Dey & Christopher J. Flinn, 2005. "An Equilibrium Model of Health Insurance Provision and Wage Determination," Econometrica, Econometric Society, vol. 73(2), pages 571-627, March.
    2. Rendon Sílvio, 2006. "Job Search And Asset Accumulation Under Borrowing Constraints ," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 47(1), pages 233-263, February.
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    5. Royalty, Anne Beeson & Abraham, Jean M., 2006. "Health insurance and labor market outcomes: Joint decision-making within households," Journal of Public Economics, Elsevier, vol. 90(8-9), pages 1561-1577, September.
    6. Timothy J. Gronberg & W. Robert Reed, 1994. "Estimating Workers' Marginal Willingness to Pay for Job Attributes Using Duration Data," Journal of Human Resources, University of Wisconsin Press, vol. 29(3), pages 911-931.
    7. J. Ignacio Garcia-Perez & Silvio Rendon, 2004. "Family job search and consumption: the added worker effect revisited," 2004 Meeting Papers 518, Society for Economic Dynamics.
    8. Hwang, Hae-shin & Mortensen, Dale T & Reed, W Robert, 1998. "Hedonic Wages and Labor Market Search," Journal of Labor Economics, University of Chicago Press, vol. 16(4), pages 815-847, October.
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    Keywords

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    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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