Who pays for public employee health costs?

Jeffrey Clemens and David M. Cutler

Journal of Health Economics, 2014, vol. 38, issue C, 65-76

Abstract: We analyze the incidence of public-employee health benefits. Because these benefits are negotiated through the political process, relevant labor market institutions deviate significantly from the competitive, private-sector benchmark. Empirically, we find that roughly 15 percent of the cost of recent benefit growth was passed onto school district employees through reductions in wages and salaries. Strong teachers’ unions were associated with relatively strong linkages between benefit growth and growth in total compensation. Our analysis is consistent with the view that the costs of public workers’ benefits are difficult to monitor, contributing to benefit oriented, and often under-funded, compensation schemes.

Keywords: Health insurance; Benefit incidence; State and local government finances; Public sector unions; Fiscal federalism (search for similar items in EconPapers)
JEL-codes: H72 H75 H77 I13 J32 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

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Related works:
Chapter: Who Pays for Public Employee Health Costs? (2013)
Working Paper: Who Pays for Public Employee Health Costs? (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jhecon:v:38:y:2014:i:c:p:65-76

DOI: 10.1016/j.jhealeco.2014.04.008

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