Equilibrium Labor Market Search and Health Insurance Reform

Naoki Aizawa and Hanming Fang

No 18698, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We present and empirically implement an equilibrium labor market search model where risk averse workers facing medical expenditure shocks are matched with firms making health insurance coverage decisions. Our model delivers a rich set of predictions that can account for a wide variety of phenomenon observed in the data including the correlations among firm sizes, wages, health insurance offering rates, turnover rates and workers' health compositions. We estimate our model by Generalized Method of Moments using a combination of micro data sources including Survey of Income and Program Participation (SIPP), Medical Expenditure Panel Survey (MEPS) and Robert Wood Johnson Foundation Employer Health Insurance Survey. We use our estimated model to evaluate the equilibrium impact of the 2010 Affordable Care Act (ACA) and find that it would reduce the uninsured rate among the workers in our estimation sample from 20.12% to 7.27%. We also examine a variety of alternative policies to understand the roles of different components of the ACA in contributing to these equilibrium changes. Interestingly, we find that the uninsured rate will be even lower (at 6.44%) if the employer mandate in the ACA is eliminated.

JEL-codes: G22 I11 I13 J32 (search for similar items in EconPapers)
Date: 2013-01
New Economics Papers: this item is included in nep-hea, nep-ias and nep-lab
Note: EH LS PE
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Citations: View citations in EconPapers (28)

Published as Naoki Aizawa & Hanming Fang, 2020. "Equilibrium Labor Market Search and Health Insurance Reform," Journal of Political Economy, vol 128(11), pages 4258-4336.

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Related works:
Working Paper: Equilibrium Labor Market Search and Health Insurance Reform (2015)
Working Paper: Equilibrium Labor Market Search and Health Insurance Reform (2013)
Working Paper: Equilibrium Labor Market Search and Health Insurance Reform (2012)
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