The Economic Vision Verified
A new NBER study finds:
- There is a one-to-one tradeoff between wages and employer spending on health insurance. In other words, employees “pay for” their fringe benefit with reduced wages.
- The dead weight loss from the Massachusetts employer mandate is less than 5% of what it would have been if health insurance had been provided by the government and paid for with a tax on wages.
This should come as no surprise.
This is mystery to some policy wonks (and HR departments). HR is just about the only business executives who believe health coverage is merely a cost of doing business. It’s not, it’s a (non-cash) portion of employee compensation. Employees have to be productive enough to cover the cost if they want a job.
When I speak to groups, I explain that whether your employer provides coverage is based on whether most of the workers are willing to forgo enough cash washes to pay for it.
Interesting
Oh, that’s just great. And this is the map for Obamacare??
Here is another interesting ratio from the Bureau of Labor Statistics.
In private industry, health benefits cost double what is contributed for retirement and savings.
http://www.bls.gov/news.release/pdf/ecec.pdf.
Look at Table A on page 3.
Don Levit
part of the map