Health Insurance Coverage and Entrepreneurship

Contemporary Economic Policy (Impact Factor: 0.6). 02/2001; 19(4):465-78. DOI: 10.1093/cep/19.4.465
Source: RePEc


This article estimates the importance of health insurance coverage on the probability of self-employment. Using data from the 1993 Current Population Survey (CPS), the author focuses on the impact of having health insurance through one's spouse on the likelihood of self-employment. The best estimates suggest that a guaranteed alternative source of health insurance would increase the probability of self-employment between 2.3 and 4.4 percentage points for husbands and 1.2 and 4.6 percentage points for wives. The author's more conservative estimates suggest that universal coverage could increase the percentage of self-employed in the workforce by 2 to 3.5 percentage points. Copyright 2001 by Oxford University Press.

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    • "Their results were economically significant, though not statistically significant. Madrian (1998);Wellington (2001); and Fairlie et al. (2011) also studied similar effects utilizing the later SIPP and CPS data sets, and found similar results: individuals with higher demand for health expenditures are more likely to be " locked, " the lack of portability for health insurance coverage does depress business formation, and alternative source of insurance does raise entry into self-employment. Their estimations of these effects are both economically and statistically significant. "
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    ABSTRACT: We utilize the NLSY97 data to study the impact of health insurance coverage on the decision to enter self-employment. We find that employer insurance coverage has a strong "pull" effect on the decision, especially among older males. Older females who gain dependent coverage are more likely to start a business, but a causal relationship cannot be established due to endogeneity. Health insurance coverage has little impact on the entry decision of more serious entrepreneurs: those who started a corporation, stared employer businesses and claim to be the manager of their businesses.
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    • "They find that health insurance portability had no systematic effect on this transition. However, again using secondary economic data from the early 1990s, Wellington (2001) estimates the impact of health insurance availability through a spouse on the probability of self-employment. She finds the availability of health insurance could increase self-employment by between 2 and 3.5 percent. "
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    ABSTRACT: Unlike prior studies of the impact of health insurance on entrepreneurship, this paper uses primary data from a representative recent survey of entrepreneurs. First, we report the characteristics and socio-economic backgrounds of entrepreneurs. Second, we document that the lack of health insurance has a significant inhibiting impact on entrepreneurs. This paper also documents that the importance of health insurance availability increases for entrepreneurs who are self-funded, married, have children, are from less privileged backgrounds and are in advanced stages of their lives as indicated by having advanced degrees or long work experience when they become entrepreneurs. These results should be of much interest to scholars, managers and policymakers.
    Journal of Developmental Entrepreneurship 01/2014; 18(04). DOI:10.1142/S1084946713500258
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    • "They find no statistically significant effects of health insurance portability on transitions into self-employment. Wellington (2001) considers the effects of health insurance coverage on the probability of self-employment. She uses a cross section of data from the 1993 Current Population Survey and finds that the availability of coverage from another source (spouse) increases the likelihood of self-employment between 2 and 5 percentage points. "
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    ABSTRACT: The self‐employed face a tax‐induced disadvantage relative to wage and salary workers when it comes to the payment of health insurance premiums. This paper uses a panel of individual tax return data to test whether lower health insurance premium costs because of an expanded tax incentive result in longer periods of self‐employment. The results suggest that households claiming the deduction are indeed less likely to exit self‐employment. Equalizing the treatment of health insurance premiums for the self‐employed and wage workers by allowing full deductibility from Self‐Employment Contributions Act (SECA) taxes would result in a 7% decrease in the probability of exit.
    Contemporary Economic Policy 07/2011; 29(3):441-460. DOI:10.1111/j.1465-7287.2010.00202.x · 0.60 Impact Factor
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