Self-Employment and the Role of Health Insurance
33 Pages Posted: 25 Jan 2009
We investigate the effect of health insurance on labor market transitions in and out of self-employment as well as on the likelihood of being self-employed. We consider the role of individual health insurance coverage along with that from a spouse. Next, we examine a series of tax deductions granted to the self-employed through amendments made to the 1986 Tax Reform Act. Using data from the Current Population Survey for 1996-2007, we find significant but small effects of the after-tax health insurance premium on the entry rate, with no effect on exits from self-employment or the likelihood of being self-employed.
Keywords: health insurance, self-employment, CPS, ORG
JEL Classification: J32, J48, I11
Suggested Citation: Suggested Citation