The Labor-Supply Effects of Universal Health Coverage: What Can We Learn from Individuals with Spousal Coverage?

Abstract

We examine the labor-supply implications of universal health coverage by studying individuals who receive insurance through their spouses' employers. We find that spousal coverage has the largest impact on the labor-supply behavior of wives. Wives with spousal coverage have participation rates that are 19.5 percentage points lower and work on average 7.1 to 14.8 percent fewer hours annually than otherwise similar wives. Husbands with spousal coverage have participation rates that are 4.1 to 9.1 percentage points lower and supply less than 3.6 percent fewer hours. These estimates suggest that universal health coverage would reduce the labor supply of the U.S. population by approximately 6.2 percent annually.

JEL Classification: J3, J2, I1