The Efficiency of a Group-Specific Mandated Benefit: Evidence From Health Insurance Benefits for Maternity / Jonathan Gruber.

Format:

Book

Author/Creator:

Gruber, Jonathan.

Contributor:

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w4157.

NBER working paper series no. w4157

Language:

English

Subjects (All):

Employee fringe benefits.

Employee fringe benefits--Taxation.

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

The Efficiency of a Group-Specific Mandated Benefit

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1992.

Cambridge, Massachusetts : National Bureau of Economic Research, 1992.

Summary:

I consider the effects of "group-specific mandated benefits", such as mandated maternity leave, which raise the costs of employing a demographically identifiable group. The efficiency of these policies, relative to more broad-based financing of benefits expansions, will largely be a function of the valuation of the mandated benefit by the targeted group. Such valuation should be reflected in substantial shifting of the cost of the mandate to groupspecific wages; however, there may be barriers to the adjustment of relative wages which impede such shifting. I study several 1976 state mandates which stipulated that childbirth be covered comprehensively in health insurance plans, increasing the cost of insuring women of child-bearing age by as much as 5 % of their wages. I find substantial shifting of the costs of these mandates to the wages of the targeted group. Correspondingly, I find little effect on total labor input for the group which benefitted from these mandates; hours rise and employment falls, as may be expected from an increase in the fixed costs of employment. These results are confirmed by using a 1978 Federal mandate as a "reverse experiment".

Notes:

Print version record

September 1992.