Health Insurance Benefit Mandates and the Firm-Size Distribution

James Bailey and Douglas Webber

No 9292, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: By 2010, the average US state had passed 37 health insurance benefit mandates (laws requiring health insurance plans to cover certain additional services). Previous work has shown that these mandates likely increase health insurance premiums, which in turn could make it more costly for firms to compensate employees. Using 1996–2010 data from the Quarterly Census of Employment and Wages and a novel instrumental variables strategy, we show that there is limited evidence that mandates reduce employment. However, we find that mandates lead to a distortion in firm size, benefiting larger firms that are able to self-insure and thus exempt themselves from these state-level health insurance regulations. This distortion in firm size away from small businesses may lead to substantial decreases in productivity and economic growth.

Keywords: employment; interest groups; self-insurance; benefit mandates; health insurance; firm size (search for similar items in EconPapers)
JEL-codes: I13 I18 J32 L51 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2015-08
New Economics Papers: this item is included in nep-bec, nep-hea, nep-ias and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Published - published in: Journal of Risk and Insurance, 2018, 85 (2), 577-595

Downloads: (external link)
https://docs.iza.org/dp9292.pdf (application/pdf)

Related works:
Journal Article: Health Insurance Benefit Mandates and Firm Size Distribution (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp9292

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().