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The Labor Market Effects of Rising Health Insurance Premiums

Katherine Baicker and Amitabh Chandra
Journal of Labor Economics
Vol. 24, No. 3, Program Evaluation, Human Capital, and Labor Market Public Policy: A Research Conference in Honor of Mark C. BergerWilliam R. Johnson, Coeditor, and James P. Ziliak, Guest CoeditorSponsored by UK Center for Poverty Research, Department of Economics, Center for Business and Economic Research, Gatton College of Business and Economics, and Office of the Executive Vice President for Research at the University of Kentucky; and The W. E. Upjohn Institute for Employment ResearchProgram Evaluation, Human Capital, and Labor Market Public Policy: A Research Conference in Honor of Mark C. BergerWilliam R. Johnson, Coeditor, and James P. Ziliak, Guest CoeditorSponsored by UK Center for Poverty Research, Department of Economics, Center for Business and Economic Research, Gatton College of Business and Economics, and Office of the Executive Vice President for Research at the University of Kentucky; and The W. E. Upjohn Institute for Employment Research (July 2006), pp. 609-634
DOI: 10.1086/505049
Stable URL: http://www.jstor.org/stable/10.1086/505049
Page Count: 26
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Since scans are not currently available to screen readers, please contact JSTOR User Support for access. We'll provide a PDF copy for your screen reader.
The Labor Market Effects of Rising Health Insurance Premiums
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Abstract

We estimate the effect of rising health insurance premiums on wages, employment, and the distribution of part‐time and full‐time work using variation in medical malpractice payments driven by the recent “medical malpractice crisis.” We estimate that a 10% increase in health insurance premiums reduces the aggregate probability of being employed by 1.2 percentage points, reduces hours worked by 2.4%, and increases the likelihood that a worker is employed only part time by 1.9 percentage points. For workers covered by employer provided health insurance, this increase in premiums results in an offsetting decrease in wages of 2.3%.

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