Does Public Health Insurance Reduce Labor Market Flexibility or Encourage the Underground Economy? Evidence from Spain and the United States / Sara De La Rica, Thomas Lemieux.

Format:

Book

Author/Creator:

De La Rica, Sara.

Contributor:

National Bureau of Economic Research.

Lemieux, Thomas.

Series:

Working Paper Series (National Bureau of Economic Research) no. w4402.

NBER working paper series no. w4402

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1993.

Summary:

This paper compares the labor market implications of the health insurance system in Spain and in the United States. While most health insurance is privately provided to workers (by employers) in the United States, Spanish workers obtain health insurance coverage from the public social security system. The Spanish system is financed by a payroll (social security) tax shared between employers and employees. There is clear evidence, however, of widespread non-compliance with the social security tax. This paper empirically compares the incidence of health insurance coverage among U.S. workers to the pattern of compliance with the social security tax among Spanish workers. The main finding of this paper is that these two patterns are very similar. They both depend on the same supply and demand factors, which is consistent with basic economic models of private provision of benefits and of tax compliance. However, one important difference between the two systems is that in Spain, unlike the United States, essentially all heads of household work in the covered sector and thus have a full access to public health care for themselves and for their dependents.

Notes:

Print version record

July 1993.