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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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  11. Tracy L. Regan & Gulcin Gumus, 2006. "Tax Incentives as a Solution to the Uninsured: Evidence from the Self-Employed," Working Papers 0709, University of Miami, Department of Economics, revised Oct 2007.
  12. Becker, Gary S, 1973. "A Theory of Marriage: Part I," Journal of Political Economy, University of Chicago Press, vol. 81(4), pages 813-46, July-Aug..
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  24. David M. Cutler & Brigitte C. Madrian, 1998. "Labor Market Responses to Rising Health Insurance Costs: Evidence on Hours Worked," RAND Journal of Economics, The RAND Corporation, vol. 29(3), pages 509-530, Autumn.
  25. 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.
  26. Edward C. Norton & Hua Wang & Chunrong Ai, 2004. "Computing interaction effects and standard errors in logit and probit models," Stata Journal, StataCorp LP, vol. 4(2), pages 154-167, June.
  27. Lara D. Shore-Sheppard, 2000. "The Effect of expanding medicaid eligibility on the distribution of childrenÆs health insurance coverage," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 54(1), pages 59-77, October.
  28. Finis Welch, 1993. "Matching the Current Population Surveys," Stata Technical Bulletin, StataCorp LP, vol. 2(12).
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