'Competition' among employers offering health insurance

David Dranove*, Kathryn E. Spier, Laurence Baker

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

46 Scopus citations


Most employees contribute towards the cost of employer-sponsored insurance, despite tax laws that favor zero contributions. Contribution levels vary markedly across firms, and the average contribution (as a percentage of the premium) has increased over time. We offer a novel explanation for these facts: employers raise contribution levels to encourage their employees to obtain coverage from their spouses' employer. We develop a model to show how the employee contribution required by a given firm depends on characteristics of the firm and its work force, and find empirical support for many of the model's predictions.

Original languageEnglish (US)
Pages (from-to)121-140
Number of pages20
JournalJournal of Health Economics
Issue number1
StatePublished - Jan 2000


  • Employee
  • Employer
  • Health insurance

ASJC Scopus subject areas

  • Health Policy
  • Public Health, Environmental and Occupational Health


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