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The Value of Health Insurance: A Household Job Search Approach

Conti, G; Ginja, R; Narita, R; (2018) The Value of Health Insurance: A Household Job Search Approach. (IZA Discussion Papers 11706). Institute of Labor Economics: Bonn, Germany. Green open access

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Abstract

Do households value access to free health insurance when making labor supply decisions? We answer this question using the introduction of universal health insurance in Mexico, the Seguro Popular (SP), in 2002. The SP targeted individuals not covered by Social Security and broke the link between access to health care and job contract. We start by using the rollout of SP across municipalities in a differences-indifferences approach, and find an increase in informality of 4% among low-educated families with children. We then develop and estimate a household search model that incorporates the pre-reform valuation of formal sector amenities relative to the alternatives (informal sector and non-employment) and the value of SP. The estimated value of the health insurance coverage provided by SP is below the government's cost of the program, and the corresponding utility gain is, at most, 0.56 per each peso spent.

Type: Working / discussion paper
Title: The Value of Health Insurance: A Household Job Search Approach
Open access status: An open access version is available from UCL Discovery
Publisher version: https://www.iza.org/publications/dp/11706
Language: English
Additional information: This version is the version of record. For information on re-use, please refer to the publisher’s terms and conditions.
Keywords: Health Insurance, Job search, Household behaviour, Informality, Unemployment
UCL classification: UCL
UCL > Provost and Vice Provost Offices > UCL SLASH
UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS
UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS > Dept of Economics
URI: https://discovery.ucl.ac.uk/id/eprint/10117375
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