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Effects of health insurance on labour supply: A systematic review

Nga Le Thi Quynh (), Wim Groot (), Sonila M. Tomini () and Florian Tomini ()
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Nga Le Thi Quynh: UNU-MERIT, and Maastricht University
Wim Groot: TIER, and CAPHRI School for Public Health and Primary Care, Maastricht University
Sonila M. Tomini: UNU-MERIT, and Maastricht University
Florian Tomini: Amsterdam School of Economics, University of Amsterdam,

No 17, MERIT Working Papers from United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT)

Abstract: This study provides a systematic review of empirical evidence on the labour supply effects of health insurance. The outcomes in the 63 studies reviewed include labour supply in terms of hours worked and the probability of employment, self-employment and the level of economic formalisation. One of the key findings is that the current literature is vastly concentrated on the US. We show that spousal coverage in the US is associated with reduced labour supply of secondary earners. The effect of Medicaid in the US on labour supply of its recipients is ambiguous. However we have initial evidence of labour supply distortion caused by Children's Health Insurance Program, Affordable Care Act and other public health insurance expansions. A tentative result is that dependent young adults in the US who can access health insurance via their parents' employer have lower labour supply through fewer hours worked while keeping the same employment probability. The employment-coverage link is an important determinant of labour supply of people with health problems. The same holds for self-employment decisions. Universal coverage may create either an incentive or a disincentive to work depending on the design of the system. Finally, evidence on the relationship between health insurance and the level of economic formalisation in developing countries is fragmented and limited.

Keywords: health insurance; labour supply; labour market (search for similar items in EconPapers)
JEL-codes: I13 J22 (search for similar items in EconPapers)
Date: 2017-03-23
New Economics Papers: this item is included in nep-hea, nep-ias and nep-iue
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