• Corpus ID: 53071022

The Effect of Rising Health Insurance Costs on Compensation and Employment

@inproceedings{Anand2013TheEO,
  title={The Effect of Rising Health Insurance Costs on Compensation and Employment},
  author={Priyanka Anand},
  year={2013}
}

• Priyanka Anand
• Published 2013
• Economics

This paper examines the extent to which establishments in the U.S. respond to rising health insurance costs by adjusting employee compensation and employment. I examine this question using microdata from the National Compensation Survey, a panel dataset on compensation, health insurance coverage, hours worked, and employment for a sample of establishments across the U.S. These data are unique because they contain detailed information on health insurance plan participation, as well as contribution amounts by both employers and employees. Furthermore, the panel structure of the data allows me to analyze changes in compensation, employment, and health insurance costs within establishments over time. I find that establishments that offer health insurance reduce total compensation by $0.52 for each dollar increase in health insurance costs. Establishments primarily rely on increasing employee contributions when passing along the additional cost of health insurance to workers, while the effect on wages and non-health fringe benefits is approximately zero. ∗I am grateful to Joe Altonji, David Berger, Erica Blom, Rebecca Edwards, Dora Gicheva, Rachel Heath, Lisa Kahn, Amanda Kowalski, Fabian Lange, Rick Mansfield, Costas Meghir, Vincent Pohl, Francis Song, and Joe Vavra for useful discussions. I also thank Keenan Dworak-Fisher and Mike Lettau for their invaluable assistance with the data. This research was conducted with restricted access to Bureau of Labor Statistics (BLS) data. The views expressed here do not necessarily reflect the views of the BLS. email: [e-mail]