The Determinants of Rising Inequality in Health Insurance and Wages, Second Version

77 Pages Posted: 5 Mar 2013 Last revised: 13 Jul 2015

Rong Hai

University of Miami - School of Business Administration; University of Chicago - Becker Friedman Institute for Research in Economics

Multiple version iconThere are 2 versions of this paper

Date Written: July 13, 2015

Abstract

Over the last 30 years in the U.S., less educated workers have experienced a sharp decline in health insurance coverage rate and stagnant wage growth. In contrast, more educated workers' health insurance coverage rate has stayed relatively stable and their wages have rapidly grown. This paper investigates the determinants of the increase in inequality in health insurance coverage and wages by estimating an overlapping generations equilibrium model of labor and health insurance markets' demand and supply. The estimated model is used to quantify the effects of changes in aggregate factors (including rising cost of medical care services, Medicaid eligibility expansion, skill-biased technological changes in the labor market, and changes in the labor force composition) on the inequality of health insurance coverage and wages. I find that the interaction between the rising cost of medical services and labor market technological change is the most important determinant of the widening gap of health insurance coverage.

Keywords: Inequality, Health Insurance, Labor Market, Health Insurance Market

JEL Classification: I11, J31, J32

Suggested Citation

Hai, Rong, The Determinants of Rising Inequality in Health Insurance and Wages, Second Version (July 13, 2015). PIER Working Paper No. 13-071 . Available at SSRN: https://ssrn.com/abstract=2228312 or http://dx.doi.org/10.2139/ssrn.2228312

Rong Hai (Contact Author)

University of Miami - School of Business Administration ( email )

P.O. Box 248126
Florida
Coral Gables, FL 33124
United States

HOME PAGE: http://https://sites.google.com/site/ronghaiecon/

University of Chicago - Becker Friedman Institute for Research in Economics ( email )

Chicago, IL 60637
United States

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