Employer Health Insurance Mandates and the Risk of Unemployment

Employer health insurance mandates form the basis of many health care reform proposals. Proponents make the case that they will increase insurance, while opponents raise the concern that low-wage workers will see offsetting reductions in their wages and that in the presence of minimum wage laws some of the lowest wage workers will become unemployed. We construct an estimate of the number of workers whose wages are so close to the minimum wage that they cannot be lowered to absorb the cost of health insurance, using detailed data on wages, health insurance, and demographics from the Current Population Survey (CPS). We find that 33 percent of uninsured workers earn within $3 of the minimum wage, putting them at risk of unemployment if their employers were required to offer insurance. Assuming an elasticity of employment with respect to minimum wage increase of -0.10, we estimate that 0.2 percent of all full-time workers and 1.4 percent of uninsured full-time workers would lose their jobs because of a health insurance mandate. Workers who would lose their jobs are disproportionately likely to be high school dropouts, minority, and female. This risk of unemployment should be a crucial component in the evaluation of both the effectiveness and distributional implications of these policies relative to alternatives such as tax credits, Medicaid expansions, and individual mandates, and their broader effects on the well-being of low-wage workers.     

Labor market dynamics under long-term wage contracting

Recent research seeking to explain the strong cyclicality of US unemployment emphasizes the role of wage rigidity. This paper proposes a micro-founded model of wage rigidity—an equilibrium business cycle model of job search, where risk neutral firms post optimal long-term contracts to attract risk averse workers. Equilibrium contracts feature wage smoothing, limited by the inability of parties to commit to contracts. The model is consistent with aggregate wage data if neither worker nor firm can commit, producing too rigid wages otherwise. Wage rigidity does not lead to a substantial increase in the cyclical volatility of unemployment.     

Worker replacement

Consider a labor market in which firms want to insure existing employees against income fluctuations and, simultaneously, want to recruit new employees to fill vacant jobs. Firms can commit to a wage policy, i.e. a policy that specifies the wage paid to their employees as a function of tenure, productivity and other observables. However, firms cannot commit to employ workers. In this environment, the optimal wage policy prescribes not only a rigid wage for senior workers, but also a downward rigid wage for new hires. The downward rigidity in the hiring wage magnifies the response of unemployment to negative shocks.     

Was spricht eigentlich gegen eine private Arbeitslosenversicherung?

This article wants to base the current discussion about the privatization of unemployment insurance on a perspective of insurance economics. The arguments against private unemployment insurance are separated in two prospects: insurance technique and social policy. Therefore, the mixing of objective-technical and normative arguments, which is widely spread in the literature, is broken down. It is shown that the only criterion, which holds against private unemployment insurance, is that of “relative poorness”. Consequently, from a social policy perspective the monetary burden of actuarial premiums on people at high and medium risk is not acceptable. Arguments like positively correlated risks, moral hazard, insufficient differentiation of premiums and collectively underestimated individual unemployment risks appear to be poorly valid. As a solution of the problem of “relative poorness” a new outline for privatization of unemployment insurance is presented. The proposal focuses on a combination of private unemployment and pension insurance.     

Commitment problems justify subsidies for medical insurance

Consumers who believe that government will provide them with some public medical care, even if they did not purchase medical insurance, may choose to purchase no such insurance. The amount of medical care consumed will then be less than the first-best optimum. Under specified conditions government can then increase the welfare of consumers by subsidizing insurance, or by providing public health care at a more generous level than the minimum it would otherwise give.     

On the Political Economy of Low Skilled Immigration and the Welfare State

This paper inquires into the collective decision making on both unemployment insurance and immigration. It is shown that low skill immigration typically increases the contribution rate to the unemployment insurance system. This can translate into higher benefits, the increase of the economy-wide unemployment rate nonwithstanding. The host country allows for immigration only if high skilled natives are sufficiently powerful. Furthermore, political rights of immigrants are restricted to a minimum.     

混合供给模式下巨灾保险市场的激励与约束研究

巨灾保险具有准公共物品属性,既可以由政府提供,也可以由市场提供,单纯依靠政府和私人市场提供都存在较大弊端,政府和私人部门合作,采用混合供给模式可以形成互补优势,提高效率,这已成为国际巨灾保险市场发展的一大趋势。本文以混合供给模式下的巨灾保险市场为对象,分析巨灾保险市场中的委托代理关系,并对如何构建有效的激励与约束机制进行了初步探讨。     

劳动保护影响了企业经营绩效吗? ——来自我国最低工资标准调整的经验证据

依据最低工资数据与上市公司微观数据,研究最低工资标准调整对企业经营绩效的影响及其作用机制.研究表明:最低工资标准上升提升了企业经营绩效,而且在竞争程度高的行业、民营企业、小规模企业最低工资标准上升对企业经营绩效的提升作用更显著.机制检验显示:一方面,最低工资标准上升会倒逼企业增加科研投入,用技术替代劳动,提升企业经营绩效;另一方面,会产生效率工资效应,提高企业经营效率,提升企业经营绩效.     

Labor tax reform, unemployment, and search

A key obstacle to reducing payroll taxes in many industrialized and transition countries is the direct revenue loss to the government that it implies. This paper studies a simple and practical labor tax reform of reducing a payroll tax and increasing a progressive wage tax that keeps the marginal tax wedge unchanged. Such a strategy increases employment, reduces the equilibrium unemployment rate, and increases public revenue as long as workers do not have all the bargaining power in wage negotiations. Moreover, welfare rises if workers’ bargaining power is sufficiently large to exceed a critical value determined by the second-best Hosios condition.      

Migration and Social Replacement Incomes: How to Protect Low-Income Workers in the Industrialized Countries Against the Forces of Globalization and Market Integration

This paper discusses how an industrialized country could defend the living standard of its unskilled workers against the wage competition from immigrants. It shows that fixing social replacement incomes implies migration into unemployment. Defending wages with replacement incomes brings about first order efficiency losses that approximate the budget cost of the government. By contrast, wage subsidies involve much smaller welfare losses. While the exclusion of migrants from a national wage replacement program does not avoid the distortions in labor migration, the (temporary) exclusion of migrants from a national wage subsidy program makes it possible to reach the first best migration pattern despite the preservation of the welfare state.JEL Code: F15, F22, I38, H5, J61     

Who Gets What From Employer Pay or Play Mandates?

Critics of pay or play mandates, borrowing from the large empirical minimum wage literature, argue that they reduce employment. Borrowing from a smaller empirical minimum wage literature, we argue that they also are a blunt instrument for funding health insurance for the working poor. The vast majority of those who benefit from pay or play mandates, which require employers to either provide appropriate health insurance for their workers or pay a flat per hour tax to offset the cost of health care live in families with incomes twice the poverty line or more, and depending on how coverage is determined, the mandate will leave a significant share of the working poor ineligible for such benefits either because their hourly wage rate is too high or they work for smaller exempt firms.     

Environmental Tax Reform in a Small Open Economy With Structural Unemployment

The paper examines the effects of an environmental tax reform in a small open economy with decentralised wage bargaining, monopolistically competitive firms and equilibrium unemployment. There is a tradable and a non-tradable sector and all firms use labour as well as an imported polluting factor of production (energy). A key result is that a tax on energy, recycled to reduce the payroll tax, reduces unemployment if there is a tradable sector wage premium. However, even if energy taxes may boost employment, welfare will not necessarily improve. Numerical simulations suggest that energy taxes in general provide an environmental dividend but also reduce real GDP.     

Social Security,Unemployment, and Growth

The paper develops an overlapping generations model that highlights interactions between social security, unemployment and growth. The social security system has two components: old age pensions and unemployment insurance. Pensions have a direct effect on economic growth. Both pensions and unemployment benefits influence equilibrium unemployment caused by wage bargaining. Since unemployment deteriorates growth, both types of social security have an indirect negative effect on growth.JEL Code: E24, H55, J51     

政府失业目标调整与就业质量——来自微观企业层面的证据

本文探讨地方政府失业目标调整对企业就业质量的影响。以2870份市级政府工作报告中计划失业率测量政府失业目标,以企业冗员反向测量就业质量,研究发现:更宽松的失业目标调整会降低冗员,提升就业质量;这种调整影响存在非对称性,企业对失业目标的上调更为敏感,会显著降低企业冗员,但下调影响并不显著,这说明调整影响更多来自政府导向下的企业主动行为。本文也发现失业目标调整的影响在民企、补贴较少的公司和市场化程度高的地区更强。最后,本文发现更宽松的失业目标调整会提高企业全要素生产率和公司价值。本文结论表明,在失业目标管理中,除考虑就业率之外,还应关注就业质量,通过引导企业创造新的更合适的就业岗位来实现“更高质量和更充分就业”目标。     

美国失业保险税对我国的启示

美国的失业保险是联邦和州政府的合作项目,它通过失业保险税来融资。其失业保险税立法及执行保障层次高,税制设计科学合理。建议我国在借鉴美国失业保险税制的基础上,尽快颁布《社会保险法》,建立中央和地方两种失业保险税,在具体规定上给予地方一定的自主权,采用失业保险税率的经验评估方法,以进一步改革和完善我国的失业保险缴贲制度。     

Income Taxation and Wage Policy: An Application to Minimum Wage

In this paper, we explore how the government can play a role in affecting the compensation policies of private firms in a manner that complements its income tax policies. We illustrate how this role of the government can be served by minimum wage legislation. JEL Code: H2, D6     

Das Hamburger Beihilfemodell – Ein Vergleich der internen Renditen von GKV und PKV

At the beginning of their career civil servants in Germany can choose between the social health insurance system and a private plan combined with a direct reimbursement of the government up to 80%. Most civil servants chose the latter, also because they have to cover all contribution payments to the social system themselves, while normal employees get nearly 50% from their employers. The state of Hamburg decided to change the system by paying a share of the contributions if civil servants choose the social plan. Using a comparison of internal rates of return in both schemes, we show that this celebrated reform will not change the decision calculus for the average civil servant household and will probably thereby increase the adverse selection of high risk cases towards the social health insurance.     

Exploring the future for pensions pillarisation

The pensions pillarisation agenda envisages a reduction in the role of social insurance while simultaneously advocating the parallel expansion of fully funded private sector, occupational and personal retirement contingencies. Widespread perception of looming state failure in the field of pensions delivery highlights the inherent limitations of current pension delivery arrangements. However, moves to de-emphasise the provision afforded by, predominantly, monopillar state-mandated pension systems by expanding private privision represent short-term palliative responses to deep rooted structural and demographic problems. Multipillar systems appear no more capable of guaranteeing system funding in the face of demographic ageing and structural unemployment than existing monopillar systems. Moreover, a diminished role for social insurance will leave the low paid and unemployed significantly more vulnerable in old age. Consequently, this paper argues for a pension reform agenda which, in terms of levels of income substitution, will secure an adequate social insurance element into the future.     

亚洲社会保障最低标准：基本项目及实施路径

建立亚洲社会保障最低标准,是推动亚洲社会福利水平提高的重要途径。以人类基本需求为出发点结合亚洲发展现状,这一标准至少应包括社会救助、老年和遗属年金、医疗保险、工伤保险以及失业保险几大基本项目。通过制定有效措施,分步骤、分层次地推动社会保障覆盖面的扩大是需要优先解决的问题。这既需要政府作为首要责任主体加以引导和支持,以及非政府组织和私营部门的监督和共同努力,也应加强国家和地区之间的交流与合作。     

Drought risk in Nicaragua: a crop,region and technology-specific empirical evaluation

Nicaraguan agriculture is largely rainfed. Drought risk is endemic, consistently wiping out large proportions of potential crop production. An insurance programme that would shift drought risk from farmers could therefore have significant welfare effects. A first step towards analysing drought insurance is the establishment of the empirical connection between rainfall levels and the risk of low returns to crop production. Having reviewed the nature of the agricultural insurance problem and the promise held out by drought insurance, we carry out a preliminary empirical analysis of drought risk. This is done by combining agronomic, economic and meteorological data to predict the probability that economic returns to a particular crop-region-technology combination will fall below a minimum. Four insights emerge: (1) Of the crops analysed, maize, sesame, soybeans and sorghum are the most affected by drought risk; (2) drought risk levels vary considerably across regions; (3) risk levels are also considerably affected by the choice of technology, the shifting of risks via insurance may remove a significant impediment to agricultural modernization; and (4) for some crops in some regions, the risk levels may be too high to allow successful operation of private drought insurance markets. Hence government subsidies may be in order.