Employers as Insurance Companies
We find evidence that women more dependent on their own job for health insurance reduce their labor supply by less after a diagnosis of breast cancer – the estimate difference is about 5.5 to 7 percent. Women’s subjective responses to questions about working more to maintain health insurance are consistent with the conclusions from observed behavior.
NBER Study byCathy J. Bradley, David Neumark, and Scott Barkowski.
Why can’t employers just be employers?
It appears that the authors of the study do not adjust the income of the women who have their own-earned health insurance for the value of that insurance. For two women earning the same cash wages, total compensation is higher for the woman earning her own health benefits. In other words, her marginal cost of not working is higher independent of her health status. If adjusted, would the effect the authors document (from survey data) disappear?
The study explicitly recognizes concerns that treatment decisions and health may be adversely affected if continued work is a necessity for health coverage. However, it doesn’t present evidence of ill-effects on health or mortality from continued work. Indeed, continuing routines and meaningful activities may have a positive effect on outcomes.
good points, Tom and Joe