The effect of non-employment-based health insurance program on firm's offering of health insurance: Evidence from the social health insurance system in China

Xiaoxue Li () and Liu Tian

Journal of Comparative Economics, 2020, vol. 48, issue 4, 997-1010

Abstract: To achieve universal health insurance coverage, many developing countries have established a segmented health insurance system, which contains separate programs for workers with formal employment and residents without formal employment. A potential concern with such a segmented system is that the establishment of a non-employment-based insurance program may generate a disincentive for firms to provide health insurance benefits to workers. In this study, we empirically examine this crowd-out effect of a non-employment-based insurance program, the Urban Residents Basic Medical Insurance (URBMI), in China. Exploiting city-by-year variations in the roll-out process of the program and utilizing a unique administrative dataset on Chinese firms, we find that the enactment of URBMI reduced a firm's offering of an employment-based health insurance program by a statistically significant 0.94-1.29 percentage point. This crowd-out effect was stronger among domestic private firms, new firms, and firms that are individual-owned.

Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jcecon:v:48:y:2020:i:4:p:997-1010

DOI: 10.1016/j.jce.2020.05.005

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