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The Value of Health Insurance: A Household Job Search Approach

Author

Listed:
  • Gabriella Conti

    (University College London)

  • Rita Ginja

    () (University of Bergen)

  • Renata Narita

    () (University of São Paulo)

Abstract

Do households value access to free health insurance when making labor supply decisions? We answer this question using the introduction of universal health insurance in Mexico, the Seguro Popular (SP), in 2002. The SP targeted individuals not covered by Social Security and broke the link between access to health care and job contract. We start by using the rollout of SP across municipalities in a differences-in-differences approach, and find an increase in informality of 4% among low-educated families with children. We then develop and estimate a household search model that incorporates the pre-reform valuation of formal sector amenities relative to the alternatives (informal sector and non-employment) and the value of SP. The estimated value of the health insurance coverage provided by SP is below the government’s cost of the program, and the corresponding utility gain is, at most, 0.56 per each peso spent.

Suggested Citation

  • Gabriella Conti & Rita Ginja & Renata Narita, 2018. "The Value of Health Insurance: A Household Job Search Approach," Working Papers 2018-050, Human Capital and Economic Opportunity Working Group.
  • Handle: RePEc:hka:wpaper:2018-050
    Note: M, HI
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    References listed on IDEAS

    as
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    Cited by:

    1. Miguel Niño‐Zarazúa, 2019. "Welfare and Redistributive Effects of Social Assistance in the Global South," Population and Development Review, The Population Council, Inc., vol. 45(S1), pages 3-22, December.
    2. Hanming Fang & Andrew J. Shephard, 2019. "Household Labor Search, Spousal Insurance, and Health Care Reform," NBER Working Papers 26350, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    search; household behavior; health insurance; informality; unemployment;

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • D10 - Microeconomics - - Household Behavior - - - General
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private

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