As medical prices and health care expenditures continue to rise, the government's role in the health insurance market is the subject of intensive debate. The current tax-subsidy of employer-provided health insurance is under scrutiny, as it is thought to have encouraged increases in comprehensive insurance and the demand for medical care. However, empirical studies investigating this issue have only employed data collected after major changes in the tax code were enacted in 1954. As a result, the true effect of the tax-subsidy on the development of the health insurance market has yet to be examined. This doctoral dissertation improvement award will permit the cost of placing in machine-readable form surveys conducted by the National Opinion Research Center in 1953 and 1958 which provide detailed micro-level data on medical expenses, health insurance coverage, income, savings, and employment for roughly 3,000 families drawn from an area-probability sample of the U.S. non-institutionalized population. Since the 1953 data were collected before the major tax changes, it will be possible to directly test the effect of the 1954 tax changes on the market for health insurance using a decomposition technique. In addition, the data contains valuable information that will be used in future research examining the development of the health insurance market.
