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The effect of health insurance on married female labor supply

  • Thomas C. Buchmueller
  • Robert G. Valletta

We investigate the effects of employer-provided health insurance on the labor supply of married women. Because health benefits commonly are restricted to full-time workers, wives who prefer to work short hours but have no alternate source of insurance may work long hours in order to acquire coverage for their families. We use data from the April 1993 Current Population Survey Benefits Supplement, and we exploit variation in coverage under husbands' health plans to estimate the magnitude of this effect. Our reduced-form labor supply models indicate a strong negative effect of husbands' health insurance on wives' work hours. This effect persists when we replace husbands' insurance coverage with husbands' offered insurance, and when we use a multinomial logit model that accounts for unobserved heterogeneity in family labor supply preferences.

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Paper provided by Federal Reserve Bank of San Francisco in its series Working Papers in Applied Economic Theory with number 96-09.

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Date of creation: 1996
Date of revision:
Publication status: Published in Journal of Human Resources (Winter 1999, v. 34, no. 1, pp. 42-70)
Handle: RePEc:fip:fedfap:96-09
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