Labor Market Responses to Rising Health Insurance Costs: Evidence on Hours Worked / David M. Cutler, Brigitte C. Madrian.

Format:

Book

Author/Creator:

Cutler, David M.

Contributor:

National Bureau of Economic Research.

Madrian, Brigitte C.

Series:

Working Paper Series (National Bureau of Economic Research) no. w5525.

NBER working paper series no. w5525

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Labor Market Responses to Rising Health Insurance Costs

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1996.

Summary:

Increases in the cost of providing health insurance must have some effect on labor markets, either in lower wages, changes in the composition of employment, or both. Despite a presumption that most of this effect will be in the form of lower wages, we document in this paper a significant effect on work hours as well. Using data from the CPS and the SIPP, we show that rising health insurance costs over the 1980s increased the hours worked of those with health insurance by up to 3 percent. We argue that this occurs because health insurance is a fixed cost, and as it becomes more expensive to provide, firms face an incentive to substitute hours per worker for the number of workers employed.

Notes:

Print version record

April 1996.