Economic change and health benefits: structural trends in employer-based health insurance

Abstract

Drawing on structural theories of economic outcomes, we investigated how economic change affects the distribution of health benefits, the main source of health insurance for American workers. Through an aggregate level analysis, we show how the effects of industry level characteristics on the level of health benefits change between 1988 and 1997. Due to the increased reliance on women, nonwhite workers, and part-time labor, we expect declines in the effect sizes of gender and race composition and proportion full-time. In contrast, we predict increases in the effects of proportion small firm employment, proportion union, and industry sector due to rising health care costs, the competitive economic environment, and greater union effectiveness. We analyze data from the March Current Population Surveys for 1987 to 1997 using generalized least-squares regression. The positive effect of proportion white increases over time, while the positive effect of level of full-time work declines. The negative effects of small firm employment and being a retail or nonprofessional service industry increase in magnitude. Both union activity and gender composition have stable effects over the period. The results challenge views of a declining significance of race and gender in the labor market.