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American Economic Journal: Economic Policy: Vol. 3 No. 4 (November 2011)

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The Effect of an Employer Health Insurance Mandate on Health Insurance Coverage and the Demand for Labor: Evidence from Hawaii

Article Citation

Buchmueller, Thomas C., John DiNardo, and Robert G. Valletta. 2011. "The Effect of an Employer Health Insurance Mandate on Health Insurance Coverage and the Demand for Labor: Evidence from Hawaii." American Economic Journal: Economic Policy, 3(4): 25-51.

DOI: 10.1257/pol.3.4.25

Abstract

We examine the effects of the most durable employer health insurance mandate in the United States, Hawaii's Prepaid Health Care Act, using Current Population Survey data covering the years 1979 to 2005. Relying on a variation of the classical Fisher permutation test applied across states, we find that Hawaii's law increased insurance coverage over time for worker groups with low rates of coverage in the voluntary market. We find no statistically significant support for the hypothesis that the mandate reduced wages and employment probabilities. Instead, its primary detectable effect was an increased reliance on exempt part-time workers. (JEL G22, I18, J23, J32)

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Authors

Buchmueller, Thomas C. (U MI)
DiNardo, John (U MI)
Valletta, Robert G. (Federal Reserve Bank of San Francisco)

JEL Classifications

G22: Insurance; Insurance Companies
I18: Health: Government Policy; Regulation; Public Health
J23: Labor Demand
J32: Nonwage Labor Costs and Benefits; Private Pensions

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