Labor Market Implications of Rising Costs of Employer-Provided Health Insurance

Rebecca Meyer, Peter Orazem and William A. Wachenheim

Staff General Research Papers Archive from Iowa State University, Department of Economics

Abstract: Variation in income tax policies and health insurance costs are shown to be theoretically appropriate instruments to identify endogenous firm wage and benefit offers in a labor supply model. Empirical results show that firms are more likely to provide health insurance benefits in states with high marginal income tax rates and low hospitalization costs. The model implies that over the 1983-1995 period, large increases in health insurance costs and reductions in marginal income tax rates lowered the probability of receiving health insurance benefits from employers by 10 percentage points. This decrease in benefits lowered hours of labor supply by 4-7%.

JEL-codes: I00 (search for similar items in EconPapers)
Date: 2002-04-02
New Economics Papers: this item is included in nep-hea, nep-ias and nep-lab
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:isu:genres:10016

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