Compensating wage differentials and the impact of health insurance in the public sector on wages and hours |
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| Institution: | 1. Bank of Canada, Canada;2. Drexel University, USA;3. Bureau of Labor Statistics, USA;1. Business Systems and Analytics Department, Distinguished Chair of Business Analytics, La Salle University, Philadelphia, PA 19141, USA;2. Business Information Systems Department, Faculty of Business Administration and Economics, University of Paderborn, D-33098 Paderborn, Germany;3. Faculty of Economics and Management, Free University of Bolzano, Bolzano, Italy;4. Department of Mathematics and Statistics, York University, Toronto, M3J 1P3, Canada;5. Polo Tecnologico IISS G. Galilei, Via Cadorna 14, 39100, Bolzano, Italy;1. West China School of Public Health, Sichuan University, Chengdu 610041, China;2. West China Research Center for Rural Health Development, Sichuan University, China;3. School of Economics, Peking University, Beijing 100871, China;4. College of Social Sciences, Michigan State University, 203A Berkey Hall, East Lansing, MI 48824, USA;5. Department of Geography and Geoinformation Science, George Mason University, 4400 University Drive, MS 6C3, Fairfax, VA 22030, USA;1. Department of Economics, Tufts University, Braker Hall, 8 Upper Campus Road, Medford, MA 02155, USA;2. Federal Reserve Bank of Atlanta, Research Department, 1000 Peachtree St. Northeast, Atlanta, GA 30309, USA |
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| Abstract: | This paper examines the trade-off between wages and employer spending on health insurance for public sector workers, and the relationship between coverage and hours worked. Our primary approach compares trends in wages and hours for public employees with and without state/local government provided health insurance using individual-level micro-data from the 1992–2011 CPS. To adjust for differences between insured and uninsured public sector employees, we create a matched sample based on an employee's propensity to receive health insurance. We assess the relationship between state contribution to the health plan premium, state-level healthcare spending, and the wages and hours of state and local government employees. We find modest reductions in wages are associated with having employer-sponsored health insurance (ESHI), although this effect is not precisely measured. The reduction in wages associated with having ESHI is larger among non-unionized workers. Further, we find little evidence that provision of health insurance increases hours worked. |
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| Keywords: | Public Health insurance Wage Tradeoff Hours worked |
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