Employer-provided Health Insurance and Labor Supply of Married Women

Merve Cebi () and Chunbei Wang
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Merve Cebi: Department of Economics, University of Massachusetts Dartmouth, 285 Old Westport Road, North Dartmouth, MA 02747, USA.
Authors registered in the RePEc Author Service: Merve Meral ()

Eastern Economic Journal, 2013, vol. 39, issue 4, 493-510

Abstract: This work presents new evidence on the relationship between husbands’ health insurance and wives’ labor supply. Several studies using cross-sectional data have suggested that spousal coverage reduces wives’ labor supply; however, these estimates potentially suffer from bias due to simultaneity of wives’ labor supply and husbands’ health insurance. This paper attempts to obtain consistent estimates by applying several panel data estimators to data from the National Longitudinal Survey of Youth. The estimates suggest that the negative relationship found in cross-sections results mainly from spousal sorting and selection; controlling for unobserved heterogeneity leads to a smaller estimated effect of spousal coverage on wives’ labor supply.

Date: 2013
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