The effect of self-employed health insurance subsidies on self-employment

Heim, Bradley T.; Lurie, Ithai Z.

doi:10.1016/j.jpubeco.2010.08.007

Cited by 56 publications

(52 citation statements)

References 19 publications

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“…Furthermore, if the policy induced taxpayers with low relative prices to become self-employed, and those taxpayers also have strong preferences for purchasing health insurance, then estimating elasticities using cross-sectional variation would again bias the elasticity upward. 18 This result, then, points to the importance of using within-taxpayer over time variation when attempting 18 See, for example, Heim and Lurie (2009), who find that the decrease in the price of health insurance for the self-employed led to a significant increase in the probability of self-employment, and that the majority of the response consisted of taxpayers becoming self-employed and claiming the self-employed health insurance deduction.…”

Section: Take-up Resultsmentioning

confidence: 99%

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Do increased premium subsidies affect how much health insurance is purchased? Evidence from the self-employed

Heim

Lurie

2009

Journal of Health Economics

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Section: Take-up Resultsmentioning

confidence: 99%

“…This discussion draws from the discussion of policy changes examined inHeim and Lurie (2009).3 Taxpayers who hold greater than a 2% share in an S corporation who receive wages from the S corporation are also eligible for the deduction.…”

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confidence: 99%

Do increased premium subsidies affect how much health insurance is purchased? Evidence from the self-employed

Heim

Lurie

2009

Journal of Health Economics

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“…Using changes in the self-employed health insurance deduction, Heim and Lurie (2010) found that dSE dPrice HI…”

Section: Introductionmentioning

confidence: 99%

Does health reform affect self-employment? Evidence from Massachusetts

Heim

Lurie

2014

Small Bus Econ

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This paper evaluates whether the implementation of the 2006 Massachusetts health reform law affected the decision of taxpayers to be selfemployed, using both difference-in-differences and synthetic control methods on a panel of tax returns that spans 1999-2010. Though tenuous, our results suggest that the reform led to a decline in the rate of taxpayers earning a majority of income from self-employment. In addition, it appears to have had a positive impact on earning some self-employment income among joint filers and earning the majority of income from selfemployment among older taxpayers, but these were offset by negative impacts on single filers and taxpayers age 35-49.

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“…This policy reform allowed entrepreneurs to deduct increasing portions of their health insurance premiums from their taxable income. Heim and Lurie (2010) and Gurley-Calvez (2011) use a panel of tax return data, whereas Velamuri (2012) and Gumus and Regan (2014) employ CPS data. The results from the four articles suggest that a lower after-tax price of health insurance in self-employment increases the self-employment and entry rates and decreases the exit rate, although Gumus and Regan (2014) do not find a significant effect on the entry probability.…”

Section: Extant Literature and Our Contributionsmentioning

confidence: 99%

Public Health Insurance and Entry into Self-Employment

Fossen

König

2015

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. We estimate the impact of a differential treatment of paid employees versus self-employed workers in a public health insurance system on the entry rate into entrepreneurship. In Germany, the public health insurance system is mandatory for most paid employees, but not for the selfemployed, who usually buy private health insurance. Private health insurance contributions are relatively low for the young and healthy, and until 2013 also for males, but less attractive at the other ends of these dimensions and if membership in the public health insurance allows other family members to be covered by contribution-free family insurance. Therefore, the health insurance system can create incentives or disincentives to starting up a business depending on the family's situation and health. We estimate a discrete time hazard rate model of entrepreneurial entry based on representative household panel data for Germany, which include personal health information, and we account for non-random sample selection. We estimate that an increase in the health insurance cost differential between self-employed workers and paid employees by 100 euro per month decreases the annual probability of entry into selfemployment by 0.38 percentage points, i.e. about a third of the average annual entry rate. The results show that the phenomenon of entrepreneurship lock, which an emerging literature describes for the system of employer provided health insurance in the USA, can also occur in a public health insurance system. Therefore, entrepreneurial activity should be taken into account when discussing potential health care reforms, not only in the USA and in Germany. Terms of use: Documents inJEL classification: L26, I13, J2.

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The effect of self-employed health insurance subsidies on self-employment

Cited by 56 publications

References 19 publications

Do increased premium subsidies affect how much health insurance is purchased? Evidence from the self-employed

Do increased premium subsidies affect how much health insurance is purchased? Evidence from the self-employed

Does health reform affect self-employment? Evidence from Massachusetts

Public Health Insurance and Entry into Self-Employment

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