We use cookies to provide you with the best possible website experience. This includes cookies that are necessary for the operation of the site, as well as cookies used for anonymous statistics, comfort settings, or displaying personalized content. You can decide which categories you want to allow. Please note that depending on your settings, some features of the website may not be available.

Cookie settings

These necessary cookies are required to enable the core functionality of the website. Opting out of these cookies is not possible.

cb-enable
This cookie stores the user's cookie consent status for the current domain. Expiry: 1 year.
laravel_session
Stores the session ID to recognize the user when the page reloads and to restore their login session. Expiry: 2 hours.
XSRF-TOKEN
Provides CSRF protection for forms. Expiry: 2 hours.
IZA Discussion Paper No. 4152
April 2009
The Effect of an Employer Health Insurance Mandate on Health Insurance Coverage and the Demand for Labor: Evidence from Hawaii

published in: American Economic Journal: Economic Policy, 2011, 3 (4), 25-51

Over the past few decades, policy makers have considered employer mandates as a strategy for stemming the tide of declining health insurance coverage. In this paper we examine the long term effects of the only employer health insurance mandate that has ever been enforced in the United States, Hawaii's Prepaid Health Care Act, using a standard supply-demand framework and Current Population Survey data covering the years 1979 to 2005. During this period, the coverage gap between Hawaii and other states increased, as did real health insurance costs, implying a rising burden of the mandate on Hawaii's employers. We use a variant of the traditional permutation (placebo) test across all states to examine the magnitude and statistical properties of these growing coverage differences and their impacts on labor market outcomes, conditional on an extensive set of covariates. As expected, the coverage gap is larger for workers who tend to have low rates of coverage in the voluntary market (primarily those with lower skills). We also find that relative wages fell in Hawaii over time, but the estimates are statistically insignificant. By contrast, a parallel analysis of workers employed fewer than 20 hours per week indicates that the law significantly increased employers' reliance on such workers in order to reduce the burden of the mandate. We find no evidence suggesting that the law reduced employment probabilities.

Communications
Mark Fallak
mark.fallak@liser.lu
+352 585-855-526
World of Labour
Olga Nottmeyer
olga.nottmeyer@liser.lu
+352 585-855-501
Network Coordination
Christina Gathmann
christina.gathmann@liser.lu

The IZA@LISER Network is a global community of scholars dedicated to excellence in labor economics and related fields, now coordinated at the Luxembourg Institute of Socio-Economic Research (LISER) following its transition from Bonn.

About IZA@LISER Network
Contact
IZA Network (Current Site Operator):

Luxembourg Institute of Socio-Economic Research (LISER)
11, Porte des Sciences
Maison des Sciences Humaines
L-4366 Esch-sur-Alzette / Belval, Luxembourg

IZA Institute (In Liquidation):

Forschungsinstitut zur Zukunft der Arbeit GmbH i. L.
Schaumburg-Lippe-Str. 5-9, 53113 Bonn. Germany
Phone: +49 228 3894-0 | Fax: +49 228 3894-510
E-Mail: info@iza.org | Web: www.iza.org
Represented by: Martin T. Clemens (Liquidator)