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SOCIAL SCIENCE RESEARCH NETWORK
E M P L O Y E E B E N E F I T S , C O M P E N S A T I O N
& P E N S I O N L A W
Vol. 7, No. 12: May 18, 2006
Editor: PAMELA J. PERUN
Urban Institute
PAMELA@PLANETNOW.COM
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Topic of This Issue:
Health Insurance
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T A B L E O F C O N T E N T S
"Health Insurance Take-up by the Near Elderly"
THOMAS C. BUCHMUELLER
University of California, Irvine -
Economics/Health Care Area, National Bureau of
Economic Research (NBER)
SABINA OHRI
University of California, Irvine - Department of
Economics
"Health Insurance and the Wage Gap"
HELEN LEVY
University of Michigan at Ann Arbor - Institute
for Social Research (ISR), National Bureau of
Economic Research (NBER)
"Lost Jobs and Health Insurance: An Analysis of the Impact of
Employment Volatility on Firm-Provided Health Insurance Coverage"
FREDRIK ANDERSSON
Urban Institute & U.S. Census Bureau
IBEN BOLVIG
Aarhus School of Business - Centre for Research
in Social Integration and Marginalization (CIM)
MATTHEW FREEDMAN
Government of the United States of America -
Bureau of the Census
JULIA LANE
University of Chicago - National Opinion Research
Center (NORC)
"The Effects of Retirement on Physical and Mental Health
Outcomes"
DHAVAL DAVE
Bentley College - Department of Economics,
National Bureau of Economic Research (NBER)
INAS RASHAD
Georgia State University - Department of
Economics, National Bureau of Economic Research
(NBER)
JASMINA SPASOJEVIC
Metropolitan College of New York - School for
Public Affairs and Administration
"The U.S. Health Care System and Labor Markets"
BRIGITTE C. MADRIAN
University of Pennsylvania - The Wharton School,
National Bureau of Economic Research (NBER)
"The Impact of Hours of Work on Employment-Based Health Benefits"
PAUL FRONSTIN
Employee Benefit Research Institute (EBRI)
"The Economics of Employee Benefits"
DARREN H. LUBOTSKY
University of Illinois at Urbana-Champaign
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"Health Insurance Take-up by the Near Elderly"
NBER Working Paper No. W11951
Contact: THOMAS C. BUCHMUELLER
University of California, Irvine -
Economics/Health Care Area, National Bureau of
Economic Research (NBER)
Email: TCBUCHMU@UCI.EDU
Auth-Page: http://ssrn.com/author=99648
Co-Author: SABINA OHRI
University of California, Irvine -
Department of Economics
Email: sohri@uci.edu
Auth-Page: http://ssrn.com/author=433915
Full Text: http://ssrn.com/abstract=877456
ABSTRACT: This study examines the effect of price on the demand
for health insurance by early retirees between the ages of 55 and
64. The analysis is based on administrative data from a medium
sized employer and takes advantage of a natural experiment
created by the firm's health insurance contribution policy. The
amount the firm contributes toward retiree health insurance
coverage depends on when a person retired and her years of
service at that date. As a result of this policy, there is
considerable variation in out-of-pocket premiums faced by
individuals in the data, but this variation is independent of the
non-price attributes of the health insurance plans offered, and
plausibly exogenous to individual characteristics that are likely
to affect the demand for insurance. We find that price has a
statistically significant but small effect on the decision to
take up coverage. The implied elasticities are very similar to
results found in previous studies using very different data.
______________________________
"Health Insurance and the Wage Gap"
NBER Working Paper No. W11975
Contact: HELEN LEVY
University of Michigan at Ann Arbor -
Institute for Social Research (ISR), National
Bureau of Economic Research (NBER)
Email: hlevy@umich.edu
Auth-Page: http://ssrn.com/author=406693
Full Text: http://ssrn.com/abstract=878062
ABSTRACT: Estimates of labor market inequality usually focus only
on wages, even though fringes account for almost one-third of
total compensation. Using data from the Current Population
Survey, I analyze coverage by own-employer health insurance
coverage among full-time workers for women versus men, blacks
versus whites and Hispanics versus whites. I find significant
gaps in coverage for each of these groups. About two-thirds of
the gap for blacks or Hispanics is explained by differences in
observable characteristics (primarily education and occupation).
The gap for women is not explained by controlling for
observables. Looking over the 20 year period from 1980 to 2000, I
find that the adjusted gap in own-employer coverage for women has
been relatively flat over this period and is consistently much
smaller than the male/female wage gap (about half as large), so
that measuring inequality in wages plus health insurance would
result in a smaller estimate of male/female compensation
inequality than measuring wages alone. The same is generally true
for blacks although their health insurance gap is much closer in
magnitude to their wage gap. For Hispanics, the health insurance
gap is nearly identical to the wage gap and both are increasing
over time.
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"Lost Jobs and Health Insurance: An Analysis of the Impact of
Employment Volatility on Firm-Provided Health Insurance Coverage"
Author: FREDRIK ANDERSSON
Urban Institute & U.S. Census Bureau
Email: fandersson@ui.urban.org
Auth-Page: http://ssrn.com/author=371792
Co-Author: IBEN BOLVIG
Aarhus School of Business - Centre
for Research in Social Integration and
Marginalization (CIM)
Email: ibenb@asb.dk
Auth-Page: http://ssrn.com/author=340769
Co-Author: MATTHEW FREEDMAN
Government of the United States of
America - Bureau of the Census
Auth-Page: http://ssrn.com/author=474630
Contact: JULIA LANE
University of Chicago - National
Opinion Research Center (NORC)
Email: jlane@nsf.gov
Auth-Page: http://ssrn.com/author=248639
Full Text: http://ssrn.com/abstract=894259
ABSTRACT: It is an established fact that there are high levels of
employment volatility and job loss in the United States. Despite
the importance in the U.S. insurance system of employer provided
benefits, the impact on insurance covered is not well understood.
This paper finds a negative relationship between the volatility
of a worker's employment and her likelihood of receiving
firm-provided health insurance. Previous employment volatility
reduces each of the four factors necessary to receive such
insurance: a worker's subsequent chances of getting a job; her
chances of getting a job in a firm that offers coverage; her
chance of staying with the firm long enough to become eligible
for coverage; and her ability to take up insurance if offered.
The most important impact is on the last: her ability to take up
insurance if offered. Lack of employment is not the only, and not
even the largest, barrier to individual coverage under this
system. This finding is likely to be of great policy interest,
particularly given the recent tendency of employers to shift the
cost of insurance premia onto their employees. The results hold
under a variety of specifications.
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"The Effects of Retirement on Physical and Mental Health
Outcomes"
NBER Working Paper No. W12123
Contact: DHAVAL DAVE
Bentley College - Department of
Economics, National Bureau of Economic Research
(NBER)
Email: ddave@bentley.edu
Auth-Page: http://ssrn.com/author=550748
Co-Author: INAS RASHAD
Georgia State University - Department
of Economics, National Bureau of Economic Research
(NBER)
Email: irashsad@gsu.edu
Auth-Page: http://ssrn.com/author=536635
Co-Author: JASMINA SPASOJEVIC
Metropolitan College of New York -
School for Public Affairs and Administration
Email: jspasojevic@metropolitan.edu
Auth-Page: http://ssrn.com/author=604121
Full Text: http://ssrn.com/abstract=893778
ABSTRACT: While numerous studies have examined how health affects
retirement behavior, few have analyzed the impact of retirement
on subsequent health outcomes. This study estimates the effects
of retirement on health status as measured by indicators of
physical and functional limitations, illness conditions, and
depression. The empirics are based on six longitudinal waves of
the Health and Retirement Study, spanning 1992 through 2003. To
account for biases due to unobserved selection and endogeneity,
panel data methodologies are used. These are augmented by
counterfactual and specification checks to gauge the robustness
and plausibility of the estimates. Results indicate that complete
retirement leads to a 23-29 percent increase in difficulties
associated with mobility and daily activities, an eight-percent
increase in illness conditions, and an 11-percent decline in
mental health. With an aging population choosing to retire at
earlier ages, both Social Security and Medicare face considerable
shortfalls. Eliminating the embedded incentives in Social
Security and many private pension plans, which discourage work
beyond some point, and enacting policies that prolong the
retirement age may be desirable, ceteris paribus. Retiring at a
later age may lessen or postpone poor health outcomes for older
adults, raise well-being, and reduce the utilization of health
care services, particularly acute care.
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"The U.S. Health Care System and Labor Markets"
NBER Working Paper No. W11980
Contact: BRIGITTE C. MADRIAN
University of Pennsylvania - The
Wharton School, National Bureau of Economic
Research (NBER)
Email: bmadrian@wharton.upenn.edu
Auth-Page: http://ssrn.com/author=85592
Full Text: http://ssrn.com/abstract=878067
ABSTRACT: This paper provides a broad and general overview of the
relationship between the U.S. health care system and the labor
market. The paper first describes some of the salient features of
and facts about the system of health insurance coverage in the
U.S., particularly the role of employers. It then summarizes the
empirical evidence on how health insurance impacts labor market
outcomes such as wages, labor supply (including retirement,
female labor supply, part-time vs. full-time work, and formal vs.
informal sector work), labor demand (including hours worked and
the composition of employment across full-time, part-time and
temporary workers), and job turnover. It then discusses the
implications of having a fragmented system of health insurance
delivery - in which employers play a central role - on the health
care system and health care outcomes.
______________________________
"The Impact of Hours of Work on Employment-Based Health Benefits"
EBRI Notes, Vol. 27, No. 5, May 2006
Contact: PAUL FRONSTIN
Employee Benefit Research Institute
(EBRI)
Email: FRONSTIN@EBRI.ORG
Auth-Page: http://ssrn.com/author=255140
Full Text: http://ssrn.com/abstract=900851
ABSTRACT: This paper examines changes in the distribution of
workers by hours of work and the resulting impact on
employment-based health benefits. The percentage of workers in
the labor force employed either full time or part time tends to
vary with the strength of the economy, and for various other
reasons. In 2004, 17.5 percent of workers ages 18-64 were
employed part time, up from 16.3 percent in 2000. The movement of
workers from full-time status to part-time status has significant
implications for their health benefits: In 2004, 18.6 percent of
workers employed part time were covered by employment-based
health benefits through their own employer in 2004, compared with
61.5 percent of full-time workers. As a result, any shift of
workers from full-time to part-time status will likely lead to
fewer workers with employment-based health benefits unless they
obtain them from another source, such as a working spouse.
______________________________
"The Economics of Employee Benefits"
EMPLOYEE BENEFITS: A PRIMER FOR HUMAN RESOURCE, Joseph
J. Martocchio, ed., McGraw-Hill, 2006
Contact: DARREN H. LUBOTSKY
University of Illinois at
Urbana-Champaign
Email: lubotsky@uiuc.edu
Auth-Page: http://ssrn.com/author=162132
Abstract: http://ssrn.com/abstract=901638
ABSTRACT: If health insurance and other benefit costs really do
harm U.S. businesses, why do so many firms offer these benefits?
Why not pay workers a higher salary and let them buy insurance on
their own? Do benefit costs, in fact, reduce the profits of U.S.
firms?
This chapter is an introductory analysis of the economics of
employee benefits, appropriate for undergraduates and graduate
students in economics, business, public policy, law, and human
resource management. The chapter begins with a discussion of the
role of differences in costs of providing benefits versus cash
compensation, the use of benefits as a recruiting tool, and the
role of tax incentives. The second part of the chapter analyzes
how employee wages and firm profits are affected when benefit
costs increase.