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Taxes, Health Insurance and Women's Self-Employment

  • Velamuri, Malathi

I examine whether the availability of health coverage through the spouse's health plan influences a married woman's decision to become self-employed. The Tax Reform Act of 1986 (TRA86) introduced a tax subsidy for the self-employed to purchase their own health insurance. I test whether this `natural' experiment induced more women without spousal health insurance coverage to select into self-employment. The difference-in-difference estimates based on an analysis of employed women indicate that the incidence of self-employment among women who did not enjoy spousal health bene�ts rose signi�cantly - between 14% and 25% - in the post-TRA86 period, while a multinomial speci�cation based on a sample of both employed and non-employed women suggests that the increase was around 9%.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 50474.

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Date of creation: 2009
Date of revision: Apr 2012
Publication status: Published in Contemporary Economic Policy 2.30(2012): pp. 162-177
Handle: RePEc:pra:mprapa:50474
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  23. Nada Eissa, 1995. "Taxation and Labor Supply of Married Women: The Tax Reform Act of 1986 as a Natural Experiment," NBER Working Papers 5023, National Bureau of Economic Research, Inc.
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