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Who Pays for Rising Health Care Prices? Evidence from Hospital Mergers

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Listed:
  • Zarek Brot-Goldberg
  • Zack Cooper
  • Stuart V. Craig
  • Lev R. Klarnet
  • Ithai Lurie
  • Corbin L. Miller

Abstract

We analyze the economic consequences of rising US health care prices. By increasing the cost of employer-sponsored health insurance, rising prices serve as a de facto payroll tax on labor. Using exposure to hospital mergers as an instrument, we estimate that a 1% increase in health care prices lowers payroll and employment at non-health-care employers by 0.4%. At the county level, a 1% increase in health care prices reduces labor income by 0.27%, increases flows into unemployment by 1%, and lowers federal income tax receipts by 0.4%. The disemployment effects of rising prices are concentrated among lower- and middle-income workers.

Suggested Citation

  • Zarek Brot-Goldberg & Zack Cooper & Stuart V. Craig & Lev R. Klarnet & Ithai Lurie & Corbin L. Miller, 2024. "Who Pays for Rising Health Care Prices? Evidence from Hospital Mergers," NBER Working Papers 32613, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:32613
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    More about this item

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • L4 - Industrial Organization - - Antitrust Issues and Policies

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