| This dissertation is composed of three empirical essays that explore the US health insurance market, including topics on the tradeoff between employer-based health insurance and wages, intra-firm competition among health insurance providers, and advantageous selection in the health insurance market.; The first essay tests whether there is a tradeoff between employer-based health insurance and wages in the US health insurance market. Though most of the literature in health insurance and the labor market assumes a tradeoff between employer-provided health insurance and wages, its empirical validity has not been established. Employing the Current Population Survey 2004 data, this essay assesses the tradeoff hypothesis in a distributional analysis framework using stochastic dominance tests. In addition, it contributes to the previous literature by incorporating an indirect effect of health insurance on wages into the analysis. Health insurance not only directly affects wages, but also indirectly by improving individual productivity. The results confirm the existence of a tradeoff for full time working wives, and explain why the previous literature fails to do so.; The second essay studies how economies of scale and intra-firm competition among health insurance providers affect the generosity of health plans. The essay uses the 2003 Communication Tracking Survey Employer Survey. By separating the effects of firm size, number of plans offered and number of plan administrators on the generosity of plan offered, this essay shows that economies of scale and competition have positive effects on the generosity of health insurance plans offered within a firm. Moreover, it finds that exclusive commitments between employers and health insurance providers have positive effects on the generosity of plan. Health insurance providers offer more generous plans in exchange for economies of scale and monopoly power.; The third essay tests whether there is advantageous selection in the US health insurance market. Asymmetric information is center to the study of insurance market. Instead of long believed adverse selection, which assumes equal risk attitude among insurance buyers, empirical research has found evidence of advantageous selection in auto, life insurance and Medicare markets. However, there is not much, if any, research about the health insurance, especially the employer-based health insurance market in the US. Employing the 2003 Communication Tracking Survey Household Survey, this essay finds direct evidence of advantageous selection. It also investigates the sources of advantageous selection and finds that the asymmetric information about individual characteristics, such as education, marriage, and income, and eligibility to health insurance through job are the sources of the selection. Among them, education explains most part of advantageous selection. |
