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

ABSTRACT 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 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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    • "Monheit and Harvey (1993) found that when the spouse has access to alternative sources of coverage at a large firm, the likelihood that the self-employed individual would hold employment-related insurance him/herself significantly declines. Using CPS data, Wellington (2001) reported that when a spouse holds employer-based insurance, the likelihood of business ownership improves between 2.3% and 4.4% for men and between 1.2% and 4.6% for women. Therefore, we hypothesize: H2: Having a self-employed spouse will decrease the likelihood that the self-employed will have health insurance. "
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    ABSTRACT: The United States currently faces record high levels of uninsured individuals, rising healthcare costs, and increasing self-employment. A new dataset was introduced, the American Community Surveys, to confirm whether the self-employed are at a disadvantage in terms of access to health insurance, and if so, what socioeconomic, family, demographic, and occupation factors may exacerbate the problem. Results indicate that the self-employed are in fact at a significant disadvantage regarding health insurance coverage. Family income level, marital status, having a self-employed spouse, age, ethnicity, migration status, and occupational industry were found to be associated with the likelihood that a self-employed individual would have health insurance coverage. Reports released in 2010 indicate the number of uninsured Americans has reached a record high, with the number of individuals holding private insurance at its lowest reported level since the Census Bureau began tracking such data in 1987 (Wolf, 2010). Currently, the estimated number of uninsured individuals in the United States ranges from 50.7 million (United States Census Bureau, 2010) to 59 million (Cohen & Martinez, 2010). Holahan and Cook (2008) reported that between 2000 and 2006, the number of uninsured people in the United States grew by almost three and a half million, which was attributed to a decline in the availability of employer-sponsored insurance. Although unemployment has been cited as a major contributing factor to the growing number of uninsured individuals, a recent report by the Kaiser Commission (2010) indicates that cost of coverage also likely serves as a major deterrent, given that workers currently pay approximately 47% more for family healthcare coverage than they did in 2005, and employers currently pay 20% more than they did in the same time period. Holahan and Cook (2008) contend that more than half of the increase in the number of uninsured workers between 2004 and 2006 came from the self-employed and wage earners in small firms of less than 25 people. This places the self-employed at a focus of concern since they serve as a major source of uninsurance rates, both personally and through a lack of insurance availability for their employees (Holahan & Cook, 2008; Perry & Rosen, 2001).
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