The Efficiency of a Group-Specific Mandated Benefit: Evidence from Health Insurance Benefits for Maternity
I consider the effects of "group-specific mandated benefits", such as mandated maternity leave, which raise the costs of employing a demographically identifiable group. The efficiency of these policies, relative to more broad-based financing of benefits expansions, will largely be a function of the valuation of the mandated benefit by the targeted group. Such valuation should be reflected in substantial shifting of the cost of the mandate to groupspecific wages; however, there may be barriers to the adjustment of relative wages which impede such shifting. I study several 1976 state mandates which stipulated that childbirth be covered comprehensively in health insurance plans, increasing the cost of insuring women of child-bearing age by as much as 5 % of their wages. I find substantial shifting of the costs of these mandates to the wages of the targeted group. Correspondingly, I find little effect on total labor input for the group which benefitted from these mandates; hours rise and employment falls, as may be expected from an increase in the fixed costs of employment. These results are confirmed by using a 1978 Federal mandate as a "reverse experiment".
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|Date of creation:||1992|
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- repec:fth:harver:1520 is not listed on IDEAS
- Joshua D. Angrist, 1990. "The Effect of Veterans Benefits on Veterans' Education and Earnings," NBER Working Papers 3492, National Bureau of Economic Research, Inc. Full references (including those not matched with items on IDEAS)