Health, crime, and the labor market: Theory and policy analysis

Yuki Otsu and C. Y. Kelvin Yuen

Journal of Economic Dynamics and Control, 2022, vol. 144, issue C

Abstract: Better health improves labor market outcomes, and better labor market outcomes discourage individuals from engaging in criminal behavior. Therefore, health insurance policies would affect labor market outcomes and criminal behavior. To explain the mechanism and the impact, we build an equilibrium search model of health, crime, and the labor market. We then use the model to conduct policy experiments and quantify their impacts on the economy. The calibrated model shows that the Medicare-for-all and the Employer Mandate under the Affordable Care Act would increase the aggregate output by more than 10%. However, while Medicare-for-all reduces the crime rate and inequality, the Employer Mandate increases both. Furthermore, policy effects vary by individual’s skill and health status.

Keywords: Health; Crime; Labor search; Health insurance; Crime policy (search for similar items in EconPapers)
JEL-codes: E24 I10 I13 J01 J08 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eee:dyncon:v:144:y:2022:i:c:s0165188922002330

DOI: 10.1016/j.jedc.2022.104529

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