Tax Subsidies And The Provision Of Health Insurance In Small Firms
This paper examines the effects of tax subsidies to employer provided health insurance on the distribution of insurance across firms of different sizes. I present a simple model which shows that the tax subsidies may increase the provision of insurance in smaller firms and hence help equalize the distribution of health benefits across firms. I then test this hypothesis using data in both the United States and Canada. My findings indicate that the subsidies reduce the disparity in coverage levels between large and small firms and promote insurance through the workplace instead of on the private market. These findings imply that the tax subsidies may be distorting the labor market by allowing a number of small firms to offer health insurance.
|Date of creation:||11 Nov 1999|
|Date of revision:|
|Contact details of provider:|| Postal: 150 St. George Street, Toronto, Ontario|
Phone: (416) 978-5283
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Jonathan Gruber & James M. Poterba, 1993.
"Tax Incentives and the Decision to Purchase Health Insurance: Evidence from the Self-Employed,"
NBER Working Papers
4435, National Bureau of Economic Research, Inc.
- Gruber, J. & Poterba, J., 1994. "Tax Incentives and the Decision to Purchase Health Insurance: Evidence from the Self-Employed," Working papers 94-10, Massachusetts Institute of Technology (MIT), Department of Economics.
- Jonathan Gruber & James Poterba, 1994. "Tax Incentives and the Decision to Purchase Health Insurance: Evidence from the Self-Employed," The Quarterly Journal of Economics, Oxford University Press, vol. 109(3), pages 701-733.
- Mark Stabile, 2001. "Private insurance subsidies and public health care markets: evidence from Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 34(4), pages 921-942, November.
- Feldstein, Martin & Friedman, Bernard, 1977. "Tax subsidies, the rational demand for insurance and the health care crisis," Journal of Public Economics, Elsevier, vol. 7(2), pages 155-178, April.
- Feldstein, Martin S, 1973. "The Welfare Loss of Excess Health Insurance," Journal of Political Economy, University of Chicago Press, vol. 81(2), pages 251-80, Part I, M.
- Jonathan Gruber, 1998. "Health Insurance and the Labor Market," NBER Working Papers 6762, National Bureau of Economic Research, Inc.
- Douglas Holtz-Eakin & John R. Penrod & Harvey S. Rosen, 1994.
"Health Insurance and the Supply of Entrepreneurs,"
NBER Working Papers
4880, National Bureau of Economic Research, Inc.
- Woodbury, Stephen A, 1983. "Substitution between Wage and Nonwage Benefits," American Economic Review, American Economic Association, vol. 73(1), pages 166-82, March.
- William M. Gentry & Eric Peress, 1994. "Taxes and Fringe Benefits Offered by Employers," NBER Working Papers 4764, National Bureau of Economic Research, Inc.
- Pauly, Mark V, 1986. "Taxation, Health Insurance, and Market Failure in the Medical Economy," Journal of Economic Literature, American Economic Association, vol. 24(2), pages 629-75, June.
- Keeler, Emmett B & Morrow, Daniel T & Newhouse, Joseph P, 1977. "The Demand for Supplementary Health Insurance, or Do Deductibles Matter?," Journal of Political Economy, University of Chicago Press, vol. 85(4), pages 789-801, August.
- Manning, Willard G. & Blumberg, Linda & Moulton, Lawrence H., 1995. "The demand for alcohol: The differential response to price," Journal of Health Economics, Elsevier, vol. 14(2), pages 123-148, June.
- Holmer, Martin, 1984. "Tax policy and the demand for health insurance," Journal of Health Economics, Elsevier, vol. 3(3), pages 203-221, December.
When requesting a correction, please mention this item's handle: RePEc:tor:tecipa:mstabile-99-01. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (RePEc Maintainer)
If references are entirely missing, you can add them using this form.