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Private insurance subsidies and public health care markets: evidence from Canada
Author(s) -
Stabile Mark
Publication year - 2001
Publication title -
canadian journal of economics/revue canadienne d'économique
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.773
H-Index - 69
eISSN - 1540-5982
pISSN - 0008-4085
DOI - 10.1111/0008-4085.00106
Subject(s) - subsidy , citation , health insurance , health care , health economics , library science , economics , political science , sociology , actuarial science , law , computer science
In this study I examine the effects of government subsidies to employer-provided health insurance on the decision to purchase insurance, and on utilization of publicly funded health services. Using unique variation in tax subsidies across Canadian provinces as an instrument, I estimate the effects of these subsidies on the demand for supplemental health insurance and their extended effects on the decision to use publicly-funded health services. My results show that government subsidies through tax exemptions have significant effects on the decision to purchase insurance. Furthermore, additional insurance policies lead to moral hazard in the use of publicly funded health services.