Essays on Labor, Health, and Entrepreneurship

TitleEssays on Labor, Health, and Entrepreneurship
Publication TypeThesis
Year of Publication2019
AuthorsLee, KM
Academic DepartmentPublic Policy
Number of Pages179
UniversityGeorge Mason University
Thesis Typephd
ISBN Number9781392236222
Keywords0501:Economics, 0630:Public policy, Compensating differential, Economics, Entrepreneurship, Health Insurance, Labor demand, Occupational choice, Public Policy, Social Sciences

This dissertation presents studies of the interaction of health policies and labor markets, including issues of occupational choice, labor demand, and compensating differentials. In the first essay, Health Insurance and the Supply of Entrepreneurs: Evidence from the ACA Medicaid Expansion, I examine whether the expansion of Medicaid eligibility under the Affordable Care Act increases the supply of entrepreneurs as measured by self-employment. Using the 2003–2017 Current Population Survey and focusing on childless adults in low-income households, I apply difference-in-differences, propensity score weighting, and instrumental variable (IV) methods. I find that expanding Medicaid eligibility raises the self-employment rate by 0.8 to 1.6 percentage points, without increasing self-employment exit. IV estimates imply that covered individuals have 8 to 11 percentage points higher probability to become self-employed. Exploiting additional variation by spousal coverage or poor health of individuals or their spouse within triple difference specifications, I also find evidence that the underlying mechanism of the effect was through the reduction of entrepreneurship lock. The results suggest that limited access to health insurance may be a barrier to entrepreneurship.In the second essay, Do Employer Insurance Mandates Reduce Employment? Evidence from the Massachusetts Reform, I study the impact of an employer health insurance mandate on employment in small business and firm size distribution by exploiting the Massachusetts employer mandate. Using a triple-difference method with County Business Patterns data from 2000 to 2013, I compare net employment and the number of establishments in establishment size classes above and below 10, the threshold employment of the mandate. The specification includes interactive fixed effects (size by state, size by year, state by year, industry by size, industry by state, industry by year). The results suggest that net employment above the thresholds fell by about 2 to 4 percent and the number of establishments in the same size group decreased by about 1 to 4 percent.In the third essay, Who Pays the Healthcare Costs of Chronic Diseases?, I (jointly with Chanup Jeung) examine whether 50-64 year-old workers covered by employer-sponsored insurance bear healthcare costs in the form of lower wages. Using a difference-in-difference approach with data from the Health and Retirement Study, we find that workers with chronic diseases receive significantly lower wages than healthy workers when they are covered by employer sponsored insurance. Part of the wage reduction among workers with chronic diseases can be explained by their higher healthcare usages.


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