The Labor Market Effects of Introducing National Health Insurance: Evidence from Canada

Abstract

While National Health Insurance (NHI) plans in the U.S. are often opposed on the basis of their potential disemployment effects, there is no existing evidence on the effects of NHI on employment. We provide such evidence by examining the employment consequences of NHI in Canada, using the fact that NHI was introduced on a staggered basis across the Canadian provinces. We examine monthly data on employment, wages, and hours across 8 industries and 10 provinces over the 1961- 1975 period. We find that employment actually rose after the introduction of NHI; wages increased as well, while average hours were unchanged.