TITLE: Employment-Contingent Health Insurance, Illness, and Labor Supply of Women: Evidence from Married Women with Breast Cancer

AUTHORS: Cathy Bradley, David Neumark, Zhehui Luo, and Heather L. Bednarek

PAGES: 37      DATE: April 2005

ABSTRACT: We examine the effects of employment-contingent health insurance on married women’s labor supply following a health shock. First, to clarify the conditions under which employment-contingent health insurance is likely to dampen the labor supply response, we develop a theoretical model that examines the effects of employment-contingent health insurance on the labor supply response to a health shock. Second, we empirically evaluate this relationship using primary data. As the model suggests is likely, our analysis finds that 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.

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