Employer-provided health insurance: Mobility, welfare, and labor market equilibrium

In the United States, a majority of the population gains access to health insurance coverage through their employers or a family member's employer. The primary focus of this dissertation is to quantify how this connection affects employment dynamics and economic efficiency. In addition, I study how health benefits affect inequality and welfare comparisons.; Recent research suggests that employer-provided health insurance reduces job mobility, yet doesn't quantify the welfare cost of this friction. In the first chapter, I examine the welfare consequences of employer-provided health insurance by estimating a structural job search model that incorporates health insurance benefits into the labor market decision-making process. Based on data from the Survey of Income and Program Participation between 1990 and 1993, I find that mobility rates for jobs that provide insurance are almost three times lower than jobs that do not. I then show that individuals would change jobs two more times over a twenty year period if we moved to universal coverage from the current employment-based system. In spite of the increased mobility, the welfare benefits are modest and depend crucially on how the program is financed.; In the second chapter, I develop and estimate an equilibrium model of wage and health insurance determination that yields implications that are empirically observed. Namely, not all jobs provide health insurance and jobs with insurance pay higher wages than those without insurance. While the mobility rate for jobs that provide health insurance is significantly lower than the rate for uninsured jobs, this difference is welfare enhancing since jobs with health insurance are more productive jobs.; Finally, the determination of whether one society is economically more equal than another typically involves the study of their respective income distributions. There are many other factors that influence economic inequality and, to this end, economists have developed a variety of methods to allow for the comparison of multivariate distributions. In this paper, I employ these methods to detail the state of inequality and welfare in the United States from 1981 to 1997. In addition to incomes, I include employer-provided health benefits in the analysis.