Fragility: A Quantitative Analysis of the US Health Insurance System
We develop a quantitative equilibrium model that features tax deductibility of employer-provided coverage, non-discrimination restrictions, fixed costs of coverage and employers that hire discrete numbers of workers in frictional labor markets. We use the calibrated model to understand what drives the patterns of insurance provision with employer size and to evaluate the effects of this system on the flows of workers across health insurance coverage status, labor market flows, as well as on the size distribution of establishments, and aggregate productivity. We also evaluate the effects of various proposed reforms of the system.
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