WAGE GAINS FROM BETTER HEALTH AND EMPLOYMENT-BASED HEALTH INSURANCE

Abstract

The ultimate goal of this paper is to determine the differential effects of health insurance and health status on earnings. We believe that employment-based health insurance serves two purposes. First, health insurance provides protection against catastrophic financial losses associated with illness. Second, health insurance encourages consumption of health care services, which may ultimately improve a person’s health and productivity. To determine how health insurance and health status affect earnings, we estimate an empirical model that specifically examines the relationship between health insurance, health status, and earnings. We find the following. Earnings positively affect the likelihood of having health insurance. Having health insurance improved health status for women, but not for men. Higher earnings resulted in lower health status for women, but had no effect on the health status of men, and better health status and having health insurance increased earnings for both women and men. Our analysis implies that there are some returns to employment-based health insurance that go beyond the basic purpose of insurance.

Citation

Fronstin, P., Holtmann, A.G. and Anne McGeary, K. (2003), "WAGE GAINS FROM BETTER HEALTH AND EMPLOYMENT-BASED HEALTH INSURANCE", Polachek, S.W. (Ed.) Worker Well-Being and Public Policy (Research in Labor Economics, Vol. 22), Emerald Group Publishing Limited, Leeds, pp. 351-368. https://doi.org/10.1016/S0147-9121(03)22011-2