Working Paper: NBER ID: w11304
Authors: Cathy J. Bradley; David Neumark; Zhehui Luo; Heather L. Bednarek
Abstract: We examine the effects of employment-contingent health insurance on married women's labor supply following a health shock. First, we develop a theoretical model that examines the effects of employment-contingent health insurance on the labor supply response to a health shock, to clarify under what conditions employment-contingent health insurance is likely to dampen the labor supply response. Second, we empirically evaluate this relationship using primary data. The results from our analysis find that -- as the model suggests is likely -- health shocks decrease labor supply to a greater extent among women insured by their spouse's policy than among women with health insurance through their own employer. Employment-contingent health insurance appears to create incentives to remain working and to work at a greater intensity when faced with a serious illness.
Keywords: health insurance; labor supply; breast cancer; employment
JEL Codes: I12; J22
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| health shock (breast cancer) (I19) | labor supply (women) (J21) |
| insurance source (spouse's policy) (G52) | labor supply (women) (J21) |
| insurance source (own employer) (G52) | labor supply (women) (J21) |
| insurance source (spouse's policy) (G52) | insurance source (own employer) (G52) |