| Abstract: |
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. |