We examine the effects of employment-contingent health insurance on married women's labor supply following a health shock. First, we develop a theoretical model that examines the effects of employment-contingent health insurance on the labor supply response to a health shock, to clarify under what conditions employment-contingent health insurance is likely to dampen the labor supply response. Second, we empirically evaluate this relationship using primary data. The results from our analysis find that -- as the model suggests is likely -- health shocks decrease labor supply to a greater extent among women insured by their spouse's policy than among women with health insurance through their own employer. Employment-contingent health insurance appears to create incentives to remain working and to work at a greater intensity when faced with a serious illness.
*Published:
Cathy J. Bradley & David Neumark & Zhehui Luo & Heather L. Bednarek, 2007. "Employment-contingent health insurance, illness, and labor supply of women: evidence from married women with breast cancer," Health Economics, John Wiley & Sons, Ltd., vol. 16(7), pages 719-737.
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