Abstract
This paper examines how spousal access to employer-provided health insurance (EPHI) aects preferences to acquire the same access at both the individual and household level. Household preference is investigated because, while most of EPHI provides family coverage, more hours of work are often required from the employees. Husband and wife thus have to coordinate their joint work and home production decisions. Regarding this decision process as a cooperative, simultaneous game between husband and wife, this paper shows how this joint decision is aected by individual and spousal preferences within households. Our theoretical predictions was tested using panel data from the Medical Expenditure Panel Survey. The empirical estimation controls for unobserved xed eects, and allows the EPHI access of both husband and wife to be endogenous. The empirical results show that spousal access to EPHI is negatively related to own EPHI access, indicating that household members as a unit prefer single EPHI access to dual access. Using family income share as a proxy for individual indirect utility, this study shows that the husband’s incremental disutility of having spousal EPHI access is greater than that of the wife.
Published Version
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