Self-Employment and the Role of Health Insurance

We investigate the effect of health insurance on labor market transitions in and out of self-employment as well as on the likelihood of being self-employed. We consider the role of individual health insurance coverage along with that from a spouse. Next, we examine a series of tax deductions granted...

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Bibliographic Details
Published inIDEAS Working Paper Series from RePEc
Main Authors Gumus, Gulcin, Regan, Tracy L
Format Paper
LanguageEnglish
Published St. Louis Federal Reserve Bank of St. Louis 01.01.2009
Subjects
Health insurance
Self employment
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Summary:We investigate the effect of health insurance on labor market transitions in and out of self-employment as well as on the likelihood of being self-employed. We consider the role of individual health insurance coverage along with that from a spouse. Next, we examine a series of tax deductions granted to the self-employed through amendments made to the 1986 Tax Reform Act. Using data from the Current Population Survey for 1996-2007, we find significant but small effects of the after-tax health insurance premium on the entry rate, with no effect on exits from self-employment or the likelihood of being self-employed.