The Labor Market Impact of Employer Health Benefit Mandates: Evidence from San Francisco's Health Care Security Ordinance

41 Pages Posted: 11 Jul 2011 Last revised: 21 Jul 2011

See all articles by Carrie Colla

Carrie Colla

The Dartmouth Institute for Health Policy and Clinical Practice

William Dow

University of California, Berkeley - School of Public Health

Arindrajit Dube

University of California, Berkeley - Institute for Research on Labor and Employment

Date Written: July 2011

Abstract

A key issue surrounding employer benefit mandates is the incidence on workers through wages and employment. In this paper, we address this question using a pay-or-play policy implemented in San Francisco in 2008 that requires employers to either provide health benefits or contribute to a public option health plan. We estimate the impact on employment and earnings for the private sector overall, as well as for high impact sectors: retail and accommodation and food services. We develop a novel approach for individual case studies by combining both spatial discontinuity in policies and permutation-type inference using other MSAs. We find that, compared to control counties, employment and earnings patterns in San Francisco did not change appreciably following the policy. This was true for industries most affected by the mandate, as well as for overall private sector employment. The results are generally robust to inclusion of different control groups, county-specific time trends, and varying pre-periods. In contrast to the small effects on the labor market, we do find that about 25% of surveyed restaurants imposed customer surcharges, with the median surcharge being 4% of the bill. These results indicate that while little of the burden of the mandate fell on San Francisco workers, approximately half of the incidence of the mandate fell on consumers.

Suggested Citation

Colla, Carrie and Dow, William and Dube, Arindrajit, The Labor Market Impact of Employer Health Benefit Mandates: Evidence from San Francisco's Health Care Security Ordinance (July 2011). NBER Working Paper No. w17198. Available at SSRN: https://ssrn.com/abstract=1882166

Carrie Colla (Contact Author)

The Dartmouth Institute for Health Policy and Clinical Practice ( email )

Hanover, NH 03755
United States

William Dow

University of California, Berkeley - School of Public Health ( email )

50 University Hall #7360
Berkeley, CA 94720-7360
United States

Arindrajit Dube

University of California, Berkeley - Institute for Research on Labor and Employment ( email )

2521 Channing Way #5555
Berkeley, CA 94720
United States
510-642-9951 (Phone)

HOME PAGE: http://www.irle.berkeley.edu/cwed/dube.html

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