Picking the lock: how universal healthcare programs influence entrepreneurial activities

Yu-Chen Kuo () and Jia-Huey Lin ()
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Yu-Chen Kuo: Feng Chia University
Jia-Huey Lin: Tunghai University

Small Business Economics, 2020, vol. 54, issue 1, No 2, 3-24

Abstract: Abstract A growing concern exists with regard to the possibility that nonportability of employer-provided health insurance impedes self-employment and restricts business creation. In 1995, Taiwan implemented a National Health Insurance (NHI) program that extended health insurance coverage to all citizens. Such changes provide researchers with the opportunity to observe a natural experiment. Using a difference-in-differences regression on data from the Survey of Family Income and Expenditure in Taiwan, this paper examines the effects of universal health insurance on the likelihood of being an entrepreneur. We focus on two possible types of entrepreneurial activity: employers who hire workers and own-account workers. Results showed that implementation of NHI significantly decreased the incidence of own-account workers but increased the incidence of employers who hire workers. The best estimated possibility of being an employer increases by 3.3 percentage points, after NHI. Thus, the implementation of universal health insurance enables some new businesses, while inhibiting own-account workers. These findings should be informative for countries that plan to adopt a similar health policy.

Keywords: National health insurance; Difference-in-differences; Self-employment; Entrepreneurship; I13; J48; L26 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (5)

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DOI: 10.1007/s11187-018-0077-6

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