The incidence of the healthcare costs of chronic conditions.

Who pays for the costs of chronic conditions? In this paper, we examine whether 50-64-year old workers covered by employer-sponsored insurance bear healthcare costs of chronic conditions in the form of lower wages. Using a difference-in-differences 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. Our findings suggest that higher healthcare costs of chronic conditions can explain the substantial part of the wage gap between workers with and without chronic diseases.