TY  - JOUR
AU  - Lehrer,Steven F.
AU  - Pereira,Nuno Sousa
TI  - Worker Sorting, Compensating Differentials and Health Insurance: Evidence from Displaced Workers
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 12951
PY  - 2007
Y2  - March 2007
UR  - http://www.nber.org/papers/w12951
L1  - http://www.nber.org/papers/w12951.pdf
N1  - Author contact info:
Steven F. Lehrer
School of Policy Studies
and Department of Economics
Queen's University
Kingston, ON K7L 3N6
CANADA
Tel: 613/533-6692
Fax: 613/533-2135
E-Mail: lehrers@post.queensu.ca

Sousa Periara
Department of Economics, University of Porto
Rua Dr. Roberto Frias
4200-464 Porto, Portugal
E-Mail: npereira@fep.up.pt
AB  - This article introduces an empirical strategy to the compensating differentials literature that i) allows both individual observed and unobserved characteristics to be rewarded differently in firms based on health insurance provision, and ii) selection to jobs that provide benefits to operate on both sides of the labor market. Estimates of this model are used to directly test empirical assumptions that are made with popular econometric strategies in the health economics literature. Our estimates reject the assumptions underlying numerous cross sectional and longitudinal estimators. We find that the provision of health insurance has influenced wage inequality. Finally, our results suggest there have been substantial changes in how displaced workers sort to firms that offer health insurance benefits over the past two decades. We discuss the implications of our findings for the compensating differentials literature.
ER  -