Worker Sorting, Compensating Differentials and Health Insurance: Evidence from Displaced Workers

Steven Lehrer (lehrers@queensu.ca) and Nuno Sousa Pereira

No 12951, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This article introduces an empirical strategy to the compensating differentials literature that i) allows both individual observed and unobserved characteristics to be rewarded differently in firms based on health insurance provision, and ii) selection to jobs that provide benefits to operate on both sides of the labor market. Estimates of this model are used to directly test empirical assumptions that are made with popular econometric strategies in the health economics literature. Our estimates reject the assumptions underlying numerous cross sectional and longitudinal estimators. We find that the provision of health insurance has influenced wage inequality. Finally, our results suggest there have been substantial changes in how displaced workers sort to firms that offer health insurance benefits over the past two decades. We discuss the implications of our findings for the compensating differentials literature.

JEL-codes: I11 J30 (search for similar items in EconPapers)
Date: 2007-03
New Economics Papers: this item is included in nep-hea, nep-ias and nep-lab
Note: EH LS
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Published as Lehrer, Steven F. & Pereira, Nuno Sousa, 2007. "Worker sorting, compensating differentials and health insurance: Evidence from displaced workers," Journal of Health Economics, Elsevier, vol. 26(5), pages 1034-1056, September.

Downloads: (external link)
http://www.nber.org/papers/w12951.pdf (application/pdf)

Related works:
Journal Article: Worker sorting, compensating differentials and health insurance: Evidence from displaced workers (2007)
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:nbr:nberwo:12951

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w12951

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by (wpc@nber.org).