How elastic is the firm's demand for health insurance?

• 成果类型: Article
• 署名作者: Gruber, J; Lettau, M
• 署名单位: Massachusetts Institute of Technology (MIT); United States Department of Labor
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/S0047-2727(02)00191-3
• 发表日期: 2004
• 页码: 1273-1293
• 关键词: Health insurance; tax subsidies

摘要

We investigate the impact of tax subsidies on the firm's decision to offer insurance, and on conditional firm spending on insurance. We do so using the micro-data underlying the Employment Cost Index, which has a major advantage for this exercise: the matching of very high quality compensation data with information on a sample of workers in the firm. We find that, overall, there is a moderately sized elasticity of insurance offering with respect to after-tax prices (-0.25), and a larger elasticity of insurance spending (-0.7). We also find that the elasticities are driven primarily by small firms, for whom the elasticity is larger. And we find that there is significant value added to this employer-based data: replicating methods from standard micro-data sources in our data lead to misleading estimates of these key parameters. Our simulation results suggest that major tax reform could lead to an enormous reduction in employer-provided health insurance spending. (C) 2003 Elsevier B.V. All rights reserved.