LABOR MARKET EFFECTS OF EMPLOYER‐PROVIDED HEALTH INSURANCE

This is an experimental study in economics of mandated benefits. Most individuals who have health insurance in the United States obtain it through their employer. Some states require employers to provide insurance to certain types of workers. We used an experimental laboratory to investigate possible effects of alternative health insurance regulations on the competitive labor market performance. We found that mandating the insurance for all workers creates labor market distortions, whereas mandating the insurance only for full‐time workers leads to a higher coverage than under no mandate, an increased number of part‐time workers, but does not necessarily lower market efficiency. (JEL C92, I18, J2)