Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/120942
Authors: 
Bailey, James
Webber, Douglas A.
Year of Publication: 
2015
Series/Report no.: 
IZA Discussion Papers 9292
Abstract: 
By 2010, the average US state had passed 37 health insurance benefit mandates (laws requiring health insurance plans to cover certain additional services). Previous work has shown that these mandates likely increase health insurance premiums, which in turn could make it more costly for firms to compensate employees. Using 1996–2010 data from the Quarterly Census of Employment and Wages and a novel instrumental variables strategy, we show that there is limited evidence that mandates reduce employment. However, we find that mandates lead to a distortion in firm size, benefiting larger firms that are able to self-insure and thus exempt themselves from these state-level health insurance regulations. This distortion in firm size away from small businesses may lead to substantial decreases in productivity and economic growth.
Subjects: 
health insurance
benefit mandates
self-insurance
interest groups
employment
firm size
JEL: 
L51
I13
I18
J32
Document Type: 
Working Paper

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