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Health Insurance and Productivity: Evidence from the Manufacturing Sector

Author

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  • Sang Nguyen
  • Alice Zawacki

Abstract

This paper examines the relationship between employer-sponsored offers of health insurance and establishments’ labor productivity. Our empirical work is based on unique plant level data that links the 1997 and 2002 Medical Expenditure Panel Survey-Insurance Component with the 1992, 1997, and 2002 Census of Manufactures. These linked data provide information on employer-provided insurance and productivity. We find that health insurance offers are positively associated with levels of establishments’ labor productivity. These findings hold for all manufacturers as well as those with fewer than 100 employees. Our preliminary results also show a drop in health care costs from the 75th to the 25th percentile would increase the probability of a plant offering insurance by 1.5-2.0 percent in both 1997 and 2002. The results from this paper provide encouraging and new empirical evidence on the benefits employers may reap by offering health insurance to workers.

Suggested Citation

  • Sang Nguyen & Alice Zawacki, 2009. "Health Insurance and Productivity: Evidence from the Manufacturing Sector," Working Papers 09-27, Center for Economic Studies, U.S. Census Bureau.
    • Handle: RePEc:cen:wpaper:09-27
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    File URL: https://www2.census.gov/ces/wp/2009/CES-WP-09-27.pdf
    File Function: First version, 2009
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    Citations

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    Cited by:

    1. Srikant Devaraj & Pankaj C Patel, 2017. "Health insurance and employee productivity: Findings from the 2007 Survey of Business Owners," Economics Bulletin, AccessEcon, vol. 37(2), pages 1351-1364.
    2. Lacroix, G & Brouard M-E, 2011. "Work Absenteeism Due to a Chronic Disease," Health, Econometrics and Data Group (HEDG) Working Papers 11/15, HEDG, c/o Department of Economics, University of York.
    3. C. J. Krizan & Adela Luque & Alice Zawacki, 2014. "The Effect Of Employer Health Insurance Offering On The Growth And Survival Of Small Business Prior To The Affordable Care Act," Working Papers 14-22, Center for Economic Studies, U.S. Census Bureau.

    More about this item

    Keywords

    Employer-provided health insurance; labor productivity; manufacturing industries;
    All these keywords.

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