Must Read

PrintPrint EmailEmail ShareShare CiteCite
Style:MLAAPAChicagoClose

loading...

CBO: Effects of Changes to the Health Insurance System on Labor Markets

July 13, 2009

Share

This report looks at the various ways changes to the American health insurance system could affect the labor market.

In the United States, health insurance coverage is linked to employment in ways that can affect both wages and the demand for certain types of workers. That close linkage can also affect people's decisions to enter the labor force, to work fewer or more hours, to retire, and even to work in one particular job or another.

Changes to the health insurance system could affect labor markets by changing the cost of insurance offered through the workplace and by providing new options for obtaining coverage outside the workplace. For example:

  • Requiring employers to offer health insurance-or pay a fee if they do not-is likely to reduce employment, although the effect would probably be small.
  • Providing new subsidies for health insurance that decline in value as a person's income rises could discourage some people from working more hours.
  • Increasing the availability of health insurance that is not related to employment could lead more people to retire before age 65 or choose not to work at younger ages. But it might also encourage other workers to take jobs that better match their skills, because they would not have to stay in less desirable jobs solely to maintain their health insurance.

Full Text of Document

More on This Topic

Op-Ed

Born in 1988? Sorry.

Author: Peter R. Orszag
Bloomberg.com

Peter R. Orszag writes that being born 20 years before a time of high unemployment can keep your earnings relatively low—and erode your...

Foreign Affairs Article

New World Order

Authors: Erik Brynjolfsson, Andrew McAfee, and Michael Spence

Recent advances in technology have created an increasingly unified global marketplace for labor and capital. The ability of both to flow to...