Household search and health insurance coverage

Matthew Dey, Christopher Flinn

    Research output: Contribution to journalArticlepeer-review


    Health insurance in the United States is typically acquired through an employer-sponsored program. Often employees offered employer-provided health insurance have the option to extend coverage to their spouse and dependents. We investigate the implications of the "publicness" of health insurance coverage for the labor market careers of spouses. The theoretical innovations in the paper are to extend the standard partial-partial equilibrium labor market search model to a multiple searcher setting with the inclusion of multi-attribute job offers, with some of the attributes treated as public goods within the household. The model is estimated using data from the Survey of Income and Program Participation (SIPP) using a Method of Simulated Moments (MSM) estimator. We demonstrate how previous estimates of the marginal willingness to pay (MWP) for health insurance based on cross-sectional linear regression estimators may be seriously biased due to the presence of dynamic selection effects and misspecification of the decision-making unit.

    Original languageEnglish (US)
    Pages (from-to)43-63
    Number of pages21
    JournalJournal of Econometrics
    Issue number1-2
    StatePublished - Jul 2008


    • Health insurance
    • Household behavior
    • Search
    • Wage dynamics

    ASJC Scopus subject areas

    • Applied Mathematics
    • Economics and Econometrics


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