The Wage–Health Insurance Trade‐off and Worker Selection: Evidence From the Medical Expenditure Panel Survey 1997 to 2006 |
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| Authors: | Stéphanie Lluis Jean Abraham |
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| Institution: | 1. School of Public Health, University of Minnesota, , Minneapolis, MN;2. Department of Economics, University of Waterloo, , Waterloo, ON, Canada |
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| Abstract: | Key provisions within healthcare reform will likely further increase the cost of employer‐sponsored insurance. Theory suggests that workers pay for their health insurance through a wage offset. We investigate this issue using data from the Medical Expenditure Panel Survey. GMM estimates aimed at correcting for endogenous worker mobility reveal evidence of a trade‐off for workers who are offered health insurance as the only fringe benefit. On the other hand, employees in establishments with a more comprehensive set of benefits enjoy higher wages relative to employees in establishments that offer no benefits. Health also affects the wage–health insurance trade‐off. |
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