The Demand for Insurance and Rationale for a Mandate: Evidence from Workers' Compensation Insurance

• 成果类型: Article
• 署名作者: Cabral, Marika; Cui, Can; Dworsky, Michael
• 署名单位: University of Texas System; University of Texas Austin; National Bureau of Economic Research; RAND Corporation
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.20190261
• 发表日期: 2022
• 页码: 1621-1668
• 关键词: health-insurance; adverse selection; information frictions; plan choice; MARKETS; medicare; welfare; duration; taxation

摘要

Workers' compensation insurance, which provides no-fault coverage for work-related injuries, is mandatory in nearly all states. We use administrative data from a unique market without a coverage mandate to estimate the demand for workers' compensation insurance, leveraging regulatory premium updates for identification. We find that a 1 percent increase in premiums leads to approximately a 0.3 percent decline in coverage. Drawing upon these estimates and data on costs, we examine potential justifications for government intervention to increase coverage. This analysis suggests that several forms of market failure-such as adverse selection, market power, and externalities-may not justify a mandate in this setting.