the importance of group coverage how tax policy shaped u s health insurance in 1954 the internal revenue service stipulated that employer contributions to the health insurance plans of their employees were to be excluded from employee taxable income today the tax subsidy is major feature of the u s health care market this paper examines the initial effects of the tax subsidy on the demand for health insurance using previously unexamined data from 1953 and 1958 results suggest that the tax subsidy increased the growth of group insurance particularly among union members and employed persons this is a critical effect because group insurance is not only less expensive than individual insurance but it is also easier to obtain and households with access to group health insurance are far more likely to purchase health insurance coverage than those without similar access by increasing access to group insurance the tax subsidy fostered an increase in the purchase of group health insurance by people who may not have purchased individual coverage and generated institutional change as it cemented an employment based system of group health insurance in the united states this abstract was borrowed from another version of this item

the medicaid notch labor supply and welfare participation evidence from eligibility expansions i assess the impact of losing public health insurance on labor market decisions of women by examining a series of medicaid eligibility expansions targeted toward young children these targeted expansions severed the historical tie between afdc and medicaid eligibility the reforms allowed a mother s earnings to increase without losing public health insurance for her young children increasing the income limit for medicaid resulted in a decrease in afdc participation and an increase in labor force participation among these women the effects were large for ever married women and negligible for never married women

do increased premium subsidies affect how much health insurance is purchased evidence from the self employed abstract this paper estimates the effect of recent federal and state level increases in the deductibility of health insurance premiums for self employed individuals which reduced the after tax price of health insurance on both the take up of coverage and the amount of insurance purchased using a panel of tax returns filed by self employed taxpayers from 1999 to 2004 we estimate a take up elasticity of 0 316 overall with significantly higher elasticities for single taxpayers on the intensive margin we find an elasticity of 0 733 overall

bankruptcy as implicit health insurance this paper examines the implicit health insurance that households receive from the ability to declare bankruptcy exploiting multiple sources of variation in asset exemption law i show that uninsured households with a greater financial cost of bankruptcy make higher out of pocket medical payments conditional on the amount of care received in turn i find that households with greater wealth at risk are more likely to hold health insurance the implicit insurance from bankruptcy distorts the insurance coverage decision using a microsimulation model i calculate that the optimal pigovian penalties are three quarters as large as the average penalties under the affordable care act

public health insurance individual health and entry into self employment we investigate the impact of a differential treatment of paid employees versus self employed workers in a public health insurance system on the entry rate into self employment health insurance systems that distinguish between the two sectors of employment create incentives or disincentives to start a business for different individuals we estimate a discrete time hazard rate model of entry into self employment based on representative household panel data for germany which include individual health information the results indicate that an increase in the health insurance cost differential between self employed workers and paid employees by 10 per month decreases the probability of entry into self employment by 1 7 of the annual entry rate this shows that entrepreneurship lock which an emerging literature describes for the system of employer provided health insurance in the usa can also occur in a public health insurance system therefore entrepreneurial activity should be taken into account when discussing potential health care reforms

an empirical investigation on the economic impact of shared patient information among doctors abstractthis study investigates how an increase in patient information sharing among doctors impacts healthcare costs to this end we explore this impact through two mechanisms the informative r

did the tax revolt reduce school performance abstract this paper uses detailed school level data from 49 states to analyze the effects of tax revolt era property tax limitations on school services i find that limitations are associated with larger student teacher ratios and lower cost of living adjusted starting teacher salaries all else equal these results are robust to modelling the results as endogenous and using a variety of measures for whether the limitation binds at particular schools however i find no such evidence that schools subject to limitations have reduced their administrative costs furthermore i find that limitations are associated with lower student performance on mathematics science social studies and reading examinations all else equal

tax incentives and the demand for private health insurance we analyze the effect of an individual insurance mandate medicare levy surcharge on the demand for private health insurance phi in australia with administrative income tax return data we show that the mandate has several distinct effects on taxpayers behavior first despite the large tax penalty for not having phi coverage relative to the cost of the cheapest eligible insurance policy compliance with mandate is relatively low the proportion of the population with phi coverage increases by 6 5 percentage points 15 6 at the income threshold where the tax penalty starts to apply this effect is most pronounced for young taxpayers while the middle aged seem to be least responsive to this specific tax incentive second the discontinuous increase in the average tax rate at the income threshold created by the policy generates a strong incentive for tax avoidance which manifests itself through bunching in the taxable income distribution below the threshold finally after imposing some plausible assumptions we extrapolate the effect of the policy to other income levels and show that this policy has not had a significant impact on the overall demand for private health insurance in australia

tax incentives and the demand for life insurance evidence from italy the theoretical literature suggests that taxation can have a large impact on household portfolio selection and allocation in this paper we analyze the tax treatment of life insurance considering the cancellation of tax incentives in italian life insurance contracts for investors with high marginal tax rates and the introduction of incentives for those with low rates using repeated cross sectional data from 1989 to 1998 we find that the tax reforms had no effect on the decision to invest in life insurance or the amount invested the likely explanations are the lack of information and lack of commitment to long term investment

a dynamic analysis of the demand for health insurance and health care we find that asymmetric information is important for the uptake of supplementary private health insurance and health care utilization we use dynamic panel data models to investigate the sources of asymmetric information and distinguish short run selection effects into insurance from long run selection effects short run selection effects i e responses to shocks are adverse but small in size also long run effects driven by differences in for example preferences and risk aversion are small but we find some evidence for multidimensional asymmetric information for example mental health causes advantageous selection estimates of health care utilization models suggest that moral hazard is not important

tax preferences for fringe benefits and workers eligibility for employer health insurance abstract in this paper i estimate the effect of the tax preference for employer provided health insurance on the probability that an employee will be eligible for health insurance at work i instrument for marginal tax rates with state level state income tax rates and i control for unobservable state effects that could be correlated with the state income tax instrument by comparing the estimated tax effect on employer provided health insurance to the tax effect on sick leave a fringe benefit that does not enjoy any tax advantage the size of the tax effect on health insurance eligibility is positive as predicted and is both statistically and economically significant

the rise of the modern welfare state ideology institutions and income security analysis and evidence in the 25 year period between 1960 and 1985 there was a great expansion of welfare state programs throughout the west the fraction of gdp accounted for by social expenditures doubled in much of europe and grew by 40 50 in many other oecd nations after 1985 growth in social insurance programs slowed relative to other parts of the economy this paper explores the extent to which institutions and ideological shifts may have accounted for the period of rapid growth for differences in the extent of that growth and for the subsequent reduction in the growth rates of social insurance programs

tax incentives and the decision to purchase health insurance evidence from the self employed the tax reform act of 1986 introduced a new tax subsidy for health insurance purchases by the self employed we analyze the changing patterns of insurance demand before and after tax reform to generate new estimates of how the after tax price of insurance affects the discrete choice of whether to buy insurance we employ both traditional regression models and difference in difference methods that compare changes in insurance coverage across groups around tra86 the results from our most carefully controlled comparison suggest that a 1 percent increase in the cost of insurance coverage reduces the probability that a self employed single person will be insured by 1 8 percentage points

clarifying protected and utilitarian values of critical capital abstract sustainable development may be defined as a non declining value of capital stocks social natural built and human over time the ability for substitution between and within each stock over time has been widely debated resulting in the identification and then preservation of critical capital stocks we propose that critical can be defined from two ethical perspectives teleological or consequentialist goal or ends based and deontological moral duty and rule based the consequential ethic ensures critical capitals are utilitarian in value and they generate goods and services for the maintenance of human wellbeing whilst deontologically critical capital depends on culturally and psychologically protected values which may vary locally or at least as for e g biodiversity be open to conflicting opinions this separation in the basis for defining critical capital stocks leads to awareness that some tradeoffs between critical capital stocks may be irreconcilable or likely to lead to outrage a framework is developed to guide practitioners as to how to identify critical capital stocks using both protected and utilitarian values examples show that protected values are likely to be specific to community ethnic religious cultural etc and require different methods for resolving substitutability of capital stocks to achieve sustainable development

the impact of increased tax subsidies on the insurance coverage of self employed families evidence from the 1996 2004 medical expenditure panel survey the share of health insurance premiums that self employed workers can deduct when computing federal income taxes rose from 30 percent in 1996 to 100 percent in 2003 data from the 1996 2004 medical expenditure panel survey are used to show that the increased tax subsidy was associated with substantial increases in private coverage among self employed workers and their spouses estimated effects on public coverage and the coverage of children were smaller in magnitude and less precisely estimated simulation results show that much of the post 1996 subsidy increase represented an inframarginal transfer to persons who would have had held private insurance anyway nevertheless increased subsidization expanded private coverage by 1 1 to 1 7 million persons at a cost per newly insured person less than 2 300 in all simulations a cost below that found in simulations of more broadly based subsidies

the demand for hours of labor direct evidence from california california s longstanding requirement that most women receive time and a half pay for workhours beyond eight in one day was extended to men in 1980 analyzing current population survey data from 1973 1985 and 1991 we find that this overtime penalty substantially reduced the amount of daily overtime worked by california men relative to men in other states comparisons that use women to control for california specific shocks show even stronger effects the estimates imply a price elasticity of demand for overtime hours of at least 20 5

the effect of marginal tax rates on taxable income a panel study of the 1986 tax reform act this paper uses a treasury department panel of more than 4 000 taxpayers to estimate the sensitivity of taxable income to changes in tax rates on the basis of a comparison of the tax returns of the same individual taxpayers before and after the 1986 tax reform the analysis emphasizes that the response of taxable income involves much more than a change in the traditional measures of labor supply the evidence shows an elasticity of taxable income with respect to the marginal net of tax rate that is at least one and could be substantially higher the implications for recent tax rate changes are discussed

are tax subsidies for private medical insurance self financing evidence from a microsimulation model this paper develops an empirical strategy to estimate whether subsidies to private medical insurance are self financing in countries where public and private insurance coexist and the latter covers the same treatments as the former we construct a simulation routine based on a micro econometric discrete choice model that allows us to evaluate the impact of premium changes on the utilization of outpatient and inpatient health care services as an application we estimate the budgetary effects of scrapping a subsidy from the purchase of individual private policies using micro data from catalonia our results suggest that the subsidy is not self financing this result is driven by the fact that private medical insurance holders make concurrent use of public and private services and by the price inelasticity of the demand for private policies

the impact of state tax subsidies for private long term care insurance on coverage and medicaid expenditures abstract in spite of the large expected costs of needing long term care only 10 12 of the elderly population has private insurance coverage medicaid which provides means tested public assistance and pays for almost half of long term care costs spends more than 100 billion annually on long term care in this paper i exploit variation in the adoption and generosity of state tax subsidies for private long term care insurance to determine whether tax subsidies increase private coverage and reduce medicaid s costs for long term care the results indicate that the average tax subsidy raises coverage rates by 2 7 percentage points or 28 however the response is concentrated among high income and asset rich individuals populations with low probabilities of relying on medicaid simulations suggest each dollar of state tax expenditure produces approximately 0 84 in medicaid savings over half of which funnels to the federal government

the effect of tax based savings incentives on the self employed abstract the u s individual income tax allows employers to make tax deferred contributions to qualified pension plans for their employees and in the case of the self employed on their own behalf we examine the effect of these tax based savings incentives on the self employed for this purpose we use a panel of sole proprietors constructed from the statistics of income soi individual income tax files for 1985 1989 and 1993 we find that taxes have a substantial effect on both the dichotomous decision to contribute and the amount contributed to tax deferred retirement savings plan by the self employed in general our estimates suggest a tax price elasticity of contributions around 2 0 this finding is surprisingly robust to a number of alternative specifications

the dynamics of innovative activity and competitive advantage the case of australian retail banking 1981 to 1995 this study examines the adoption of new products and processes in the australian retail banking industry over the 1981 to 1995 period our analysis demonstrates that the vast majority of observed innovative activity was based on ideas sourced from outside the focal firm and that innovations diffused very quickly across competing banks as such there were no periods during which any bank had proprietary possession of a major product or process innovation we therefore ask how the banks innovative activity could affect their relative financial performance positions we answer this question by developing a set of hypotheses that relate specific features of their histories of innovative activity to their current financial performance these hypotheses are tested using a detailed data set describing 1 297 modifications made to products and services distribution technologies and back office processes within a sample of australian retail banks over the sample period our results provide support for the general position that establishing an attractive competitive position depends on the specific history of a firm s innovative activity banks that undertook more innovative activity that were more consistent in that activity and whose composition of activity was somewhat differentiated from the industry norm tended to display superior financial performance rather than looking solely for internally generated inimitable innovations to deliver competitive advantage these results suggest that active and consistent innovative activity that is somewhat differentiated from competitors can also deliver superior financial performance

how elastic is the firm s demand for health insurance abstract 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

fringe benefits and inequality in the labor market 1 introduction wage inequality has been the topic of much recent empirical research similarly inequality in the distribution of fringe benefits has also been studied 1 on the whole the vast majority of research on inequality has examined wages and fringe benefits separately even though the cross sectional relationship between the two has been emphasized and analyzed in terms of the theory of equalizing differences rosen 1986 states the equalizing difference model is built upon the simple and intuitively compelling idea that it is the combination of wages and job attributes that constitute the relevant price of labor for market analysis of jobs thus inequality analysis based on either wages or fringe benefits alone can overlook the interaction between them and be misleading given equal productivity workers would trade fringe benefits for higher wages and vice versa however across different levels of productivity skilled workers will demand more fringe benefits simply because the benefits are normal goods moreover fringe benefits unlike wages are not taxed and skilled workers who face higher marginal tax rates are likely to demand more fringe benefits overtime one can expect the discrepancy between wages and compensation to grow because wages represent a smaller fraction of compensation 2 a few studies show potential biases in measured inequality when wages are used instead of compensation 3 however the inequality of fringe benefits at the level of the individual workers can be analyzed by focusing on the coverage rate of health insurance and pensions without knowing the monetary value of them due to data availability 4 moreover even though compensation inequality can be analyzed when the monetary values of fringe benefits are available it can be analyzed only at the level of the industry or job not at the level of the individual worker this research is different in that it uses individual level data with imputed monetary values for fringe benefits to analyze inequality in the labor market at a point in time and its growth over time deeper investigation has been conducted within the distribution to ascertain how each group is affected when fringe benefits are accounted for several alternative explanations of the observed discrepancies between wage inequality and compensation inequality are further assessed the remainder of this article is organized as follows section ii describes in detail the data used in this study section iii supplies the empirical results possible explanations for which are explored in section iv section v provides a conclusion ii data the lack of suitable data has precluded analysis of compensation inequality despite widespread interest in the topic until now no data set has contained information on both the demographic characteristics of workers and the monetary value of fringe benefits however such a data set has been created by merging individual level data from the current population survey cps and industry level data from the chamber of commerce s employee benefits survey bbs the march supplement of the cps for 1988 to 1995 supplies information on age gender years of schooling occupation of employment industry of employment wages weeks worked health insurance and pension coverage and imputed monetary value of health insurance for the year preceding the march survey year this annual survey is the largest source of information on fringe benefits and first included questions on health insurance and pension coverage in 1980 although the questionnaire items regarding health insurance were changed twice in survey years 1988 and 1995 i mitigate the problem by restricting the sample to workers ages 25 to 54 the group that the census bureau reports is the least likely to be affected gruber and poterba 1994 and by restricting the survey years to 1988 onward to focus on employer provided own health insurance coverage which is also less likely to be affected by the changes in the cps questionnaire on health insurance coverage

the welfare impact of hmo mergers abstract this paper estimates the welfare consequences of hmo mergers using data from california s small group market the analysis estimates the parameters from a differentiated products demand system the parameters are then used to simulate the effects of several hmo mergers by solving for the nash equilibrium in prices under different ownership structures even small mergers in moderately concentrated markets can result in significant consumer surplus reductions however these welfare losses can be offset by large efficiency gains the welfare consequences of hmo mergers turn less upon demand side considerations than on the health plan s ability to realize efficiencies

the effect of self employed health insurance subsidies on self employment abstract this paper estimates the effect of an increase in the deductibility of health insurance premiums for self employed individuals on the probability of being self employed using a panel of tax returns from 1999 to 2004 we estimate fixed effects instrumental variable regressions for the probability of being self employed entering into self employment and exiting from self employment our results suggest that this policy increased the probability of being self employed by 1 5 percentage points and increased the probability that a taxpayer would be primarily or exclusively self employed by 1 1 and 0 35 percentage points respectively these effects explain about a third to a half of the total increase in self employment by these definitions over the sample period we also find that the probability of entering self employment increased by 0 8 percentage points and find suggestive evidence that the probability of exit decreased by 2 8 percentage points

private insurance subsidies and public health care markets evidence from canada in this study i examine the effects of government subsidies to employer provided health insurance on the decision to purchase insurance and on utilization of publicly funded health services using unique variation in tax subsidies across canadian provinces as an instrument i estimate the effects of these subsidies on the demand for supplemental health insurance and their extended effects on the decision to use publicly funded health services my results show that government subsidies through tax exemptions have significant effects on the decision to purchase insurance furthermore additional insurance policies lead to moral hazard in the use of publicly funded health services jel classification h2 h4 11

the interaction of public and private insurance medicaid and the long term care insurance market a long tradition in public finance examines how public programs can crowd out private activ ity in areas as diverse as education savings and insurance among others these studies typi cally focus on aggregate economic implications particularly for government expenditures and national savings in this paper we demonstrate that crowd out can also have an important effect on individual welfare specifically we show that the provision of even very incomplete public insurance can crowd out more comprehensive private policies by imposing a large implicit tax on private insurance benefits thus potentially increasing overall risk exposure for individuals we examine the interaction of public and private insurance for one of the largest uninsured financial risks facing the elderly in the united states long term care expenditures at 135 bil lion in 2004 long term care expenditures represented over 8 5 percent of total health expendi tures or all ages or roughly 1 2 percent of gdp moreover real long term care expenditures are projected to triple over the next 35 years due to rising medical costs and the aging of the baby boomers only 10 percent of the elderly however have any private long term care insurance and one third of expenditures are paid for out of pocket congressional budget office cbo 1999 cbo 2004 brown and finkelstein 2007 one potential explanation for the small size of the private market is that the public insurance provided by medicaid may crowd out demand for private insurance medicaid was designed to provide long term care insurance for the poor elderly mark v pauly 1989 1990 has established the qualitative result that as an incomplete but publicly funded source of long term care insur ance medicaid has the potential to reduce substantially demand for private long term care insur ance even among the nonpoor our work builds on this insight by quantifying the magnitude of medicaid s crowd out effect and the incomplete nature of medicaid coverage we also illustrate the mechanism behind medicaid s crowd out effect and are therefore able to assess the likely impact of alternative policies on private insurance demand we develop a utility based model of a 65 year old risk averse individual who chooses an opti mal intertemporal consumption path in the presence of uncertainty about long term care expen ditures we calibrate the model using data on the distribution of long term care expenditure risk common state medicaid rules and the prices and coverage of typical private long term care insurance policies

tax incentives and the decision to purchase long term care insurance this paper studies the impact of the tax incentive prescribed in the health insurance portability and accountability act of 1996 hipaa on individuals long term care insurance purchasing behavior using data from the health and retirement study we find that the tax incentive in hipaa increased the take up rate of private ltc insurance by 3 3 percentage points or 25 for those eligible despite this seemingly strong response our results imply that even an above the line tax deduction would not increase the coverage rate of seniors beyond 13 indicating that tax incentives alone are unlikely to expand the market substantially we also present to our knowledge the first estimate of the price elasticity of demand for ltc insurance of around 3 9 suggesting that demand is highly elastic at the current low ownership rate finally we evaluate the net fiscal impact of the tax incentive and find that the tax deductibility of ltc insurance premiums leads to a net revenue loss for the government as the reduced tax revenue from granting the tax incentive exceeds the savings in medicaid s ltc expenditures

the effects of official english laws on limited english proficient workers workers with limited english skills may suffer adverse effects when states declare english the official language if employers believe official english laws allow or require them to adopt workplace english only rules that lower the demand for limited english proficient workers such laws may harm individuals who do not speak english well using data from the 1980 and 1990 censuses i estimate whether the earnings of limited english proficient workers who live in states that adopted official english laws declined relative to other workers the results suggest a substantial decline in the annual earnings of men with limited english proficiency

marginal tax rates and tax favoured pension savings of the self employed evidence from sweden in recent years the study of how individuals respond to policies that aim at promoting pension savings has emerged as a vital area of economic research this paper adds to this body of literature by estimating the tax price elasticity of contributions to tax favoured pension savings accounts on a population of self employed individuals i exploit a unique total database over the swedish population that covers the years 19992005 using instrumental variables i obtain a tax price elasticity estimate of 0 51 and an income elasticity estimate of 0 13 whereas ordinary least squares ols produces estimates that conflict with consumer theory

tax credits insurance and the use of medical care the personal income tax systems in canada the united states and elsewhere permit deductions or tax credits for out of pocket health care expenditures and private medical insurance premiums little is known about the effects of such tax measures on individual behaviour in contrast to the extensive research on the tax exemption for employer provided health insurance in this paper we exploit variation in the after tax cost of health expenditures under the tax law to estimate the tax price elasticity of demand for prescription drugs health insurance and other eligible expenditures we find evidence of moderate to large tax price elasticities compared with traditional point of service price elasticity estimates despite the apparent differences in the way tax subsidies are experienced by consumers in contrast we find no evidence the tax subsidy affects demand for health insurance on the intensive margin which we show is consistent with the theory of optimal self insurance we discuss the implications of our results for recent proposals to reform public and private health insurance systems jel classification i1 h2 credits d impot assurance et l utilisation des soins medicaux les systemes d impot sur le revenu des particuliers au canada aux etats unis et ailleurs permettent des deductions ou credits d impot pour les depenses directes en soins de sante assumees par les particuliers ou pour les primes d assurance privee on connait mal les effets de ces mesures fiscales sur le comportement des personnes par comparaison avec les resultats extensifs de la recherche sur les effets des exemptions fiscales pour l assurance sante fournie par les employeurs dans ce texte on utilise la variation dans le fardeau des depenses pour la sante apres impot selon les diverses juridictions pour evaluer l elasticite de la demande de medicaments d ordonnance de l assurance sante et d autres depenses eligibles en reponse a des differences de prix fiscaux on decouvre que l ordre de grandeur des elasticite se situe entre moderee et grande quand on les compare aux evaluations des elasticites traditionnelles de la demande aux points de service par rapport aux prix et ce malgre les differences apparentes dans les experiences de ces subventions fiscales pour les consommateurs d autre part on ne trouve pas de support pour l hypothese que les subventions fiscales affectent la demande d assurance santea la marge intensive ce qui concorde bien avec ce que nous enseigne la theorie de l auto assurance optimale on discute les implications de ces resultats pour certaines reformes recentes proposees aux systemes d assurance sante prives et publics