The Organizational Determinants of Employer-based Health Insurance

(with Samuel Bondurant)

The predominant explanation of the declining coverage rate is the growth of health insurance premium cost. Nevertheless, field and experimental studies have shown that employers who do not offer health insurance are reluctant to do so even when a substantial proportion of the cost is subsidized. These findings suggest that the decline of employment-based insurance is not solely driven by the rising cost but also a broader transformation of employment relationship in the United States. Using the Medical Expenditure Panel Survey-Insurance Component (MEPS-IC), this study examines how the provision and the terms of employment-based health insurance is co-determined by not only economic concerns but also social conditions. We find that firm's funding year, establishment-level inequality, and non-profit status, right-to-work legislation, and state-level union density are associated with the provision of health plan. The associations are robust against firm size, pay per workers, and other cost factors.

In Progress
Funded by the Agency for Healthcare Research & Quality (1 R03 HS024102-01)
 

Growing Apart: The Changing Firm-Size Wage Premium and Its Inequality Consequences


Wage inequality in the United States has risen dramatically over the past several decades, prompting scholars to develop a number of theoretical accounts for the upward trend. This study takes an organizational approach to examine how changes in the firm-size wage effect (FSWE)—a phenomenon whereby otherwise similar workers earn more when employed by large firms—have affected the wage distribution in the U.S labor market. Using data from the Current Population Survey and Survey of Income and Program Participation, our findings reveal that in 1987, although all workers benefited from a firm-size wage premium, the premium was significantly higher for individuals at the bottom (e.g., 10th and 25th percentiles) and middle of the wage distribution (e.g., 50th percentile) compared to those at the top (90th percentile). Between 1987 and 2014, however, whereas the average FSWE declined markedly, the decline was exclusive to those at the bottom and middle of the wage distribution while there was no change for those at the top. As such, the uneven declines in the FSWE across the wage distribution explain between 20 and 30 percent of rising wage inequality during this period, suggesting firms are of great importance to the study of rising inequality.

SSRN Access