TY  - JOUR
AU  - Lang,Kevin
AU  - Kang,Hong
TI  - Worker Sorting, Taxes and Health Insurance Coverage
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 13066
PY  - 2007
Y2  - April 2007
UR  - http://www.nber.org/papers/w13066
L1  - http://www.nber.org/papers/w13066.pdf
N1  - Author contact info:
Kevin Lang
Department of Economics
Boston University
270 Bay State Road
Boston, MA  02215
Tel: 617/353-5694
Fax: 617/353-4001
E-Mail: lang@bu.edu

Hong Kang
Department of Economics
Boston University
270 Bay State Road
Boston, MA  02215
Tel: 6174479390
E-Mail: kanghong@bu.edu
AB  - We develop a model in which firms hire heterogeneous workers but must offer all workers insurance benefits under similar terms. In equilibrium, some firms offer free health insurance, some require an employee premium payment and some do not offer insurance. Making the employee contribution pre-tax lowers the cost to workers of a given employee premium and encourages more firms to charge. This increases the offer rate, lowers the take-up rate, increases (decreases) coverage among high (low) demand groups, with an indeterminate overall effect. We test the model using the expansion of section 125 plans between 1987 and 1996. The results are generally supportive.
ER  -