Receipt of health insurance either through an employer or through the federal government can have profound effects on labor market decisions by older workers approaching the age of Medicare entitlement. In addition to the changes in retirement decisions by workers receiving health insurance, there may be spillover effects on the spouses of these workers who do not directly receive this insurance. The empirical spillover effects of an increase in spousal health insurance may differ from the effects of spousal monetary or health shocks. Measurement of such effects will therefore inform theory on joint labor force participation and retirement decisions of spouses. Wives may be more likely to retire when their husbands receive health insurance because public insurance is a positive income shock to the family or because they get additional utility from joint retirement. However, wives may be less likely to retire, or may enter the labor force, when their husbands receive public health insurance if they need to provide their own health insurance or their labor force participation meets a target family income. This study examines the impact of an insurance expansion on older workers and their wives, utilizing a public insurance expansion that afforded coverage to only one member of a married couple. A reform in the Veterans Affairs health care system enables examination of public insurance-induced changes in labor supply. We will investigate the causal effects of insurance on labor force participation by comparing work decisions of veterans and non-veterans and their wives before and after the policy change in a difference-in-differences framework. We will explore how these reactions vary by individual characteristics and access to employer-provided health insurance. Preliminary results suggest that as husbands obtain access to publicly-provided health insurance, their wives'labor supply rises, particularly among the less-educated.
This study examines the impact of a health insurance expansion on older workers and their wives, utilizing a public insurance reform that afforded coverage to only one member of a married couple. A reform in the U.S. Department of Veterans Affairs health care system enables examination of public insurance-induced changes in labor supply. We will investigate the causal effects of insurance on labor force participation by comparing work decisions of veterans and non-veterans and their wives before and after the policy change in a difference-in-differences framework.
| Boyle, Melissa A; Lahey, Joanna N (2016) Spousal labor market effects from government health insurance: Evidence from a veterans affairs expansion. J Health Econ 45:63-76 |
