ERIU Funded Research Projects

Author: Gruber, Jonathan ; Madrian, Brigitte
Working Paper: Health Insurance, Labor Supply, and Job Mobility: A Critical Review of the Literature (PDF) ; November 2001

Abstract:
This paper provides a critical synthesis of the literature on health insurance and labor supply. We conclude that the extant literature can be summarized with three core findings. First, health insurance matters in people’s decisions to retire or to change jobs. Second, while job lock—lack of job mobility because of fear of losing coverage—has been shown to exist, very little research has been done to determine the size of that effect or its implications for either the overall well-being of workers or the efficiency of the labor market. Third, research suggests that health insurance is not a major determinant in the decisions of low-income mothers to seek a job or leave welfare. This paper is one of six papers commissioned at the outset of ERIU to provide a critical synthesis of the existing literature on who does not have health insurance, why they do not have health insurance, and what difference health insurance makes. The papers appeared in final form in Health Policy and the Uninsured published by Urban Institute Press in 2004.

Author: Gruber, Jonathan ; McKnight, Robin
Working Paper: Why Did Employee Health Insurance Contributions Rise? (PDF) ; March 2002

Research Findings (HTML)

Abstract:
We explore the causes of the dramatic rise in employee contributions to health insurance over the past two decades. In 1982, 44% of those who were covered by their employer-provided health insurance had their costs fully financed by their employer, but by 1998 this had fallen to 28%. We discuss the theory of why employers might shift premiums to their employees, and empirically model the role of six factors suggested by the theory. We find that there was a large impact of falling tax rates, rising eligibility for insurance through the Medicaid system and through spouses, and deteriorating economic conditions (in the late 1980s and early 1990s). We also find much more modest impacts of increased managed care penetration and rising health care costs. Overall, this set of factors can explain about one-quarter of the rise in employee premiums over the 1982- 1996 period.

Author: Gruber, Jonathan ; Washington, Ebonya
Working Paper: Subsidies to Employee Health Insurance Premiums and the Health Insurance Market (PDF) ; March 2003

Research Highlight 4 (HTML) (PDF) ; January 2004
Q & A with Jonathan Gruber, Ph.D. (HTML) ; January 2004
Research Findings (HTML)

Abstract:
One approach to covering the uninsured that is frequently advocated by policy makers is subsidizing the employee portion of employer-provided health insurance premiums. But, since the vast majority of those offered employer-provided health insurance already take it up, such an approach is only appealing if there is a very high takeup elasticity among those who are offered and uninsured. Moreover, if plan choice decisions are price elastic, then such subsidies can at the same time increase health care costs by inducing selection of more expensive plans. We study an excellent example of such subsidies: the introduction of pre-tax premiums for postal employees in 1994, and then for the remaining federal employees in 2000. We do so using a census of personnel records for all federal employees from 1991 through 2002. We find that there is a very small elasticity of insurance takeup with respect to its after-tax price, and a modest elasticity of plan choice. Our results suggest that the federal government did little to improve insurance coverage, but much to increase health care expenditures, through this policy change.