Where do the sick go? Health insurance and employment in small and large firms

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dc.contributor.author Kapur, Kanika
dc.contributor.author Escarce, José J.
dc.contributor.author Marquis, M. Susan
dc.contributor.author Simon, Kosali I.
dc.date.accessioned 2008-06-20T11:54:07Z
dc.date.available 2008-06-20T11:54:07Z
dc.date.copyright Economic Research Initiative on the Uninsured at the University of Michigan en
dc.date.issued 2005-07
dc.identifier.uri http://hdl.handle.net/10197/259
dc.description.abstract Small firms that offer health insurance to their employees may face variable premiums if the firm hires an employee with high-expected health costs. To avoid expensive premium variability, a small firm may attempt to maintain a workforce with low expected health costs. In addition, workers with high-expected health costs may prefer employment in larger firms with health insurance rather than in smaller firms. This results in employment distortions. We examine the magnitude of these employment distortions using the Medical Expenditure Panel Survey from 1996 to 2001. We estimate the magnitude of distortions in hiring, employment, and separations. Furthermore, we examine the effect of state small group health insurance reforms that restrict insurers’ ability to deny coverage and restrict premium variability on employment distortions in small firms relative to large firms. We find that workers with high-expected health cost are less likely to be new hires in small firms that offer health insurance, and are less likely to be employed in insured small firms. However, we find no evidence that state small group health insurance reforms have reduced the extent of these distortions. Estimating the magnitude of employment distortions in insured small firms, and understanding the effect of small group regulation on these distortions is essential in refining reforms to the small group health insurance market. en
dc.description.sponsorship This research was supported by a grant from the Economic Research Initiative on the Uninsured at the University of Michigan. en
dc.format.extent 4640 bytes
dc.format.mimetype application/pdf
dc.language.iso en en
dc.publisher Economic Research Initiative on the Uninsured at the University of Michigan en
dc.relation.ispartofseries ERIU Working Paper en
dc.relation.ispartofseries No. 49 en
dc.relation.hasversion Kapur, K. et al (2006). 'Where Do the Sick Go? Health Insurance and Employment in Small and Large Firms'. UCD Centre for Economic Research Working Paper Series WP06/13. en
dc.rights Not to be distributed or copied without permission of the author en
dc.subject.lcsh Employer-sponsored health insurance en
dc.subject.lcsh Insurance, Health--Premiums en
dc.subject.lcsh Small business--Costs en
dc.title Where do the sick go? Health insurance and employment in small and large firms en
dc.type Working Paper en
dc.internal.authorurl Kanika Kapur (web page) en
dc.internal.authorurl http://www.ucd.ie/economics/staff/kkapur/kanika.kapur.htm en
dc.internal.authorcontactother Email: kanika.kapur@ucd.ie; Tel: 353 1 716 4624 en
dc.internal.authorid UCD0012 en
dc.internal.availability Full text available en
dc.internal.webversions http://eriu.sph.umich.edu/pdf/wp49.pdf en
dc.status Not peer reviewed en
dc.neeo.contributor Escarce|José J.|aut|
dc.neeo.contributor Kapur|Kanika|aut|UCD0012
dc.neeo.contributor Marquis|M. Susan|aut|
dc.neeo.contributor Simon|Kosali I.|aut|

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