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The Small Firms Hypothesis and the Percent of U.S. Society without Health Insurance: An Investigation Using Alternative Means Tests

Author

Listed:
  • Cebula, Richard
  • Bopp, Anthony
Abstract
The objective of this study is to proffer and then empirically investigate for the U.S. what is being identified as the “small firms hypothesis,” i.e., a hypothesis that the greater the percentage of firms that are “small,” the greater the percentage of the population that will be without health insurance. This is based on the premises that smaller firms face bargaining-power, financial, and competitive constraints that tend to limit their ability to provide group health insurance benefits to their employees, with the result being that employees at smaller firms are relatively more likely than employees at larger firms to be without a health insurance fringe benefit. The empirical analysis in the study adopts the percentage of private firms with 20 or fewer employees as the measure of “small firms.” A second objective of this study is to ascertain whether the strength (robustness) of the findings on behalf of the small firms hypothesis is sensitive to alternative measure(s) of family purchasing power or family economic status. Accordingly, eight different estimations are undertaken, each one adopting a different specification for measuring family economic status. The cross-section analysis provides strong empirical support for the “small firms hypothesis” across all of the specifications for family economic status.

Suggested Citation

  • Cebula, Richard & Bopp, Anthony, 2007. "The Small Firms Hypothesis and the Percent of U.S. Society without Health Insurance: An Investigation Using Alternative Means Tests," MPRA Paper 56722, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:56722
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    References listed on IDEAS

    as
    1. David M. Cutler, 1994. "A Guide to Health Care Reform," Journal of Economic Perspectives, American Economic Association, vol. 8(3), pages 13-29, Summer.
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    3. Richard Cebula, 2006. "A Further Analysis of Determinants of Health Insurance Coverage," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 12(3), pages 382-389, August.
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    6. Irena Dushi & Marjorie Honig, 2003. "Price and Spouse's Coverage in Employee Demand for Health Insurance," American Economic Review, American Economic Association, vol. 93(2), pages 252-256, May.
    7. Office of Health Economics, 2007. "The Economics of Health Care," For School 001490, Office of Health Economics.
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    9. Ellis, Randall P. & McGuire, Thomas G., 2007. "Predictability and predictiveness in health care spending," Journal of Health Economics, Elsevier, vol. 26(1), pages 25-48, January.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    health insurance; bargaining power; small firms;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private

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