The wage-health insurance trade-off and worker selection: Evidence from the medical expenditure panel survey 1997 to 2006

Stéphanie Lluis, Jean M Abraham

Research output: Contribution to journalArticlepeer-review

4 Scopus citations

Abstract

Key provisions within healthcare reform will likely further increase the cost of employer-sponsored insurance. Theory suggests that workers pay for their health insurance through a wage offset. We investigate this issue using data from the Medical Expenditure Panel Survey. GMM estimates aimed at correcting for endogenous worker mobility reveal evidence of a trade-off for workers who are offered health insurance as the only fringe benefit. On the other hand, employees in establishments with a more comprehensive set of benefits enjoy higher wages relative to employees in establishments that offer no benefits. Health also affects the wage-health insurance trade-off.

Original languageEnglish (US)
Pages (from-to)541-581
Number of pages41
JournalIndustrial Relations
Volume52
Issue number2
DOIs
StatePublished - Apr 1 2013

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