Employer-sponsored health insurance and the gender wage gap

Benjamin Cowan; Benjamin Schwab

doi:10.1016/j.jhealeco.2015.09.008

Employer-sponsored health insurance and the gender wage gap

J Health Econ. 2016 Jan:45:103-14. doi: 10.1016/j.jhealeco.2015.09.008. Epub 2015 Oct 30.

Authors

Benjamin Cowan¹, Benjamin Schwab²

Affiliations

¹ School of Economic Sciences, Washington State University, Hulbert Hall 101, Pullman, WA 99164, USA. Electronic address: ben.cowan@wsu.edu.
² Department of Agricultural Economics, Kansas State University, 310 Waters Hall, Manhattan, KS 66506, USA. Electronic address: benschwab@ksu.edu.

PMID: 26614691
DOI: 10.1016/j.jhealeco.2015.09.008

Abstract

During prime working years, women have higher expected healthcare expenses than men. However, employees' insurance rates are not gender-rated in the employer-sponsored health insurance (ESI) market. Thus, women may experience lower wages in equilibrium from employers who offer health insurance to their employees. We show that female employees suffer a larger wage gap relative to men when they hold ESI: our results suggest this accounts for roughly 10% of the overall gender wage gap. For a full-time worker, this pay gap due to ESI is on the order of the expected difference in healthcare expenses between women and men.

Keywords: Compensating differential; Employer-sponsored health insurance; Gender; Wages.

MeSH terms

Female
Health Benefit Plans, Employee* / economics
Health Benefit Plans, Employee* / statistics & numerical data
Humans
Male
Salaries and Fringe Benefits*
Sex Factors
United States