Compensating Differentials and Fringe Benefits: Evidence from the Medical Expenditure Panel Survey 1997-2004
In this paper, we revisited the question of the existence of a tradeoff between wages and health insurance by extending previous work in the following way: 1) we exploit richer information on health insurance in terms of whether the worker holds health insurance or whether it is offered at the firm but he/she does not hold it, 2) we analyze possible combinations of health insurance with other fringe benefits (retirement, sick leave and paid vacation), 3) we include information on workers health (self-reported) as a determinants of workers wage and mobility decision, and 4) we use an econometric framework and GMM estimations which allow us to treat the issues of endogenous choice of benefits and mobility into benefits sectors encountered in the literature and estimate the extent of worker selection into jobs with/without benefits based on unobserved individual-specific traits, skills and health status.
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