Health Care Reform: Distributional Consequences of an Employer Mandate forWorkers in Small Firms. Executive Summary of Dissertation

摘要

During the 1993-1994 health care debate, small employers expressed concern aboutthe financial burden a mandate would impose because a disproportional share of the uninsured are employed in small firms. Data from the 1987 National Medical Expenditure Survey are used to simulate the distributional effects of the 1993 Health Security Act. The results reveal why small employers were vehemently opposed to a mandate, even assuming that workers would bear the full incidence of the mandate. An employer mandate would have important effects on labor markets, leading to a deterioration in wages among small firms and changes in wage compensation for workers relative to staying out of the labor force. Workers in large firms, in contrast, would see wages increase as the cost of insurance to their employers declined. The combined effect would have likely induced labor to flow from small to large firms. The mandate would have also reduced wages (or other fringe benefits) to provide coverage that some workers already had through their spouse. This would have likely reduced labor force participation (roughly 250,0000 workers), especially among secondary workers and workers with weak attachments to the labor force. To avoid the loss of workers to large firms or out of the labor force, small firms would have been required to raise wages.