| Title | Dynamic Inefficiencies in an Employment-Based Health Insurance System: Theory and Evidence. |
| Publication Type | Journal Article |
| Year of Publication | 2011 |
| Authors | Fang, H, Gavazza, A |
| Journal | Am Econ Rev |
| Volume | 101 |
| Issue | 7 |
| Pagination | 3047-77 |
| Date Published | 2011 Dec |
| ISSN Number | 0002-8282 |
| Keywords | Employment, Health Benefit Plans, Employee, Health Expenditures, Health Status, Humans, Income, Personnel Turnover, Retirement, United States |
| Abstract | We investigate the effects of the institutional settings of the US health care system on individuals' life-cycle medical expenditures. Health is a form of general human capital; labor turnover and labor-market frictions prevent an employer-employee pair from capturing the entire surplus from investment in an employee’s health. Thus, the pair underinvests in health during working years, thereby increasing medical expenditures during retirement. We provide empirical evidence consistent with the comparative statics predictions of our model using the Medical Expenditure Panel Survey (MEPS) and the Health and Retirement Study (HRS). Our estimates suggest significant inefficiencies in health investment in the United States. |
| DOI | 10.1257/aer.101.7.3047 |
| User Guide Notes | |
| Endnote Keywords | Studies/Health care expenditures/Economic theory/Life cycles/Life cycles/Economic models/Health insurance/Employee benefits/Labor market/Human capital |
| Endnote ID | 62794 |
| Alternate Journal | Am Econ Rev |
| Citation Key | 7660 |
| PubMed ID | 29517886 |
