Health Insurance and Productivity: Evidence from the Manufacturing Sector

Abstract

The research program of the Center for Economic Studies (CES) produces a wide range of economic analyses to improve the statistical programs of the U.S. Census Bureau. Many of these analyses take the form of CES research papers. The papers have not undergone the review accorded Census Bureau publications and no endorsement should be inferred. Any opinions and conclusions expressed herein are those of the author(s) and do not necessarily represent the views of the U.S. Census Bureau. All results have been reviewed to ensure that no confidential information is disclosed. Republication in whole or part must be cleared with the authors.To obtain information about the series, see www.ces.census.gov or contact Cheryl Grim, Editor,

The Effect of Employer Health Insurance Offering on the Growth and Survival of Small Business Prior to the Affordable Care Act

“…While attempts are made in the models to control for worker quality and skill, the authors acknowledge it is difficult to distinguish between increases in small business performance resulting from unmeasured aspects of labor quality and direct ways in which health insurance may increase performance. Nguyen and Zawacki (2009) study the relationship between health insurance offers and labor productivity in the manufacturing sector. The authors point out that if health insurance improves worker health and that improved health increases productivity, then ceteris paribus, a positive relationship between health insurance offers and productivity would be seen.…”

Work Absenteeism Due to a Chronic Disease

“…While concern for moral hazard is still very much at the heart of the research, some have found that insurance schemes or sick pay policies may be beneficial to both firms and individuals. Indeed, employerprovided health insurance can improve productivity by enhancing workers' health status and work effort, thereby reducing absenteeism and workmen's compensation [Nguyen and Zawacki (2009)]. Beneficial impacts on worker turnover have also been found, although this is still disputed [Gilleskie and Lutz (2002)].…”

Work Absenteeism Due to a Chronic Disease

“…While concern for moral hazard is still very much at the heart of the research, some have found that insurance schemes or sick pay policies may be beneficial to both firms and individuals. Indeed, employerprovided health insurance can improve productivity by enhancing workers' health status and work effort, thereby reducing absenteeism and workmen's compensation [Nguyen and Zawacki (2009)]. Beneficial impacts on worker turnover have also been found, although this is still disputed [Gilleskie and Lutz (2002)].…”