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Health Insurance and the Wage Gap

Author

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  • Helen Levy
Abstract
Estimates of labor market inequality usually focus only on wages, even though fringes account for almost one-third of total compensation. Using data from the Current Population Survey, I analyze coverage by own-employer health insurance coverage among full-time workers for women versus men, blacks versus whites and Hispanics versus whites. I find significant gaps in coverage for each of these groups. About two-thirds of the gap for blacks or Hispanics is explained by differences in observable characteristics (primarily education and occupation). The gap for women is not explained by controlling for observables. Looking over the 20 year period from 1980 to 2000, I find that the adjusted gap in own-employer coverage for women has been relatively flat over this period and is consistently much smaller than the male/female wage gap (about half as large), so that measuring inequality in wages plus health insurance would result in a smaller estimate of male/female compensation inequality than measuring wages alone. The same is generally true for blacks although their health insurance gap is much closer in magnitude to their wage gap. For Hispanics, the health insurance gap is nearly identical to the wage gap and both are increasing over time.

Suggested Citation

  • Helen Levy, 2006. "Health Insurance and the Wage Gap," NBER Working Papers 11975, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:11975
    Note: EH LS
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    References listed on IDEAS

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    Cited by:

    1. Mok, Wallace & Siddique, Zahra, 2009. "Racial Differences in Fringe Benefits and Compensation," IZA Discussion Papers 4435, Institute of Labor Economics (IZA).
    2. Gulcin Gumus & Tracy Regan, 2007. "Self-Employment and the Role of Health Insurance," Working Papers 0910, University of Miami, Department of Economics.
    3. Gumus, Gulcin & Regan, Tracy L., 2015. "Self-employment and the role of health insurance in the U.S," Journal of Business Venturing, Elsevier, vol. 30(3), pages 357-374.
    4. Mok, Wallace & Siddique, Zahra, 2011. "Racial and Ethnic Inequality in Employer Provided Fringe Benefits," IZA Discussion Papers 6255, Institute of Labor Economics (IZA).
    5. Richard V. Burkhauser & Kosali I. Simon, 2010. "Measuring the Impact of Health Insurance on Levels and Trends in Inequality," NBER Working Papers 15811, National Bureau of Economic Research, Inc.
    6. Laura Bucila, 2008. "Employment-Based Health Insurance and the Minimum Wage," Working Papers 0812, College of the Holy Cross, Department of Economics.
    7. Amuedo-Dorantes, Catalina & Kimmel, Jean, 2008. "New Evidence on the Motherhood Wage Gap," IZA Discussion Papers 3662, Institute of Labor Economics (IZA).
    8. Tracy L. Regan & Gulcin Gumus, 2006. "Tax Incentives as a Solution to the Uninsured: Evidence from the Self-Employed," Working Papers 0709, University of Miami, Department of Economics, revised Oct 2007.
    9. Brooks Pierce, 2010. "Recent Trends in Compensation Inequality," NBER Chapters, in: Labor in the New Economy, pages 63-98, National Bureau of Economic Research, Inc.
    10. Rong Hai, 2013. "The Determinants of Rising Inequality in Health Insurance and Wages, Second Version," PIER Working Paper Archive 13-071, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania, revised 21 Dec 2013.
    11. Joseph A. Ritter, 2013. "Racial and Ethnic Differences in Nonwage Compensation," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 52(4), pages 829-852, October.
    12. Rong Hai, 2013. "The Determinants of Rising Inequality in Health Insurance and Wages: An Equilibrium Model of Workers' Compensation and Health Care Policies," PIER Working Paper Archive 13-019, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
    13. Rong Hai, 2013. "The Determinants of Rising Inequality in Health Insurance and Wages," Working Papers 2013-007, Becker Friedman Institute for Research In Economics.

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    More about this item

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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