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Taxes, Health Insurance and Women's Self-Employment

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  • Velamuri, Malathi

Abstract

I examine whether the availability of health coverage through the spouse's health plan influences a married woman's decision to become self-employed. The Tax Reform Act of 1986 (TRA86) introduced a tax subsidy for the self-employed to purchase their own health insurance. I test whether this `natural' experiment induced more women without spousal health insurance coverage to select into self-employment. The difference-in-difference estimates based on an analysis of employed women indicate that the incidence of self-employment among women who did not enjoy spousal health bene�ts rose signi�cantly - between 14% and 25% - in the post-TRA86 period, while a multinomial speci�cation based on a sample of both employed and non-employed women suggests that the increase was around 9%.

Suggested Citation

  • Velamuri, Malathi, 2009. "Taxes, Health Insurance and Women's Self-Employment," MPRA Paper 50474, University Library of Munich, Germany, revised Apr 2012.
    • Handle: RePEc:pra:mprapa:50474
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    Cited by:

    1. Sayeh S. Nikpay, 2020. "Entrepreneurship And Job Lock: The Interaction Between Tax Subsidies And Health Insurance Regulations," Contemporary Economic Policy, Western Economic Association International, vol. 38(1), pages 30-47, January.
    2. Fossen, Frank M. & König, Johannes, 2015. "Public health insurance and entry into self-employment," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112934, Verein für Socialpolitik / German Economic Association.
    3. Monia Lougui & Kristina Nyström, 2014. "What obstacles do entrepreneurs encounter?," Journal of Entrepreneurship and Public Policy, Emerald Group Publishing Limited, vol. 3(2), pages 275-291, October.
    4. Liu, Lulu & Zhang, Yuting, 2018. "Does non-employment based health insurance promote entrepreneurship? Evidence from a policy experiment in China," Journal of Comparative Economics, Elsevier, vol. 46(1), pages 270-283.
    5. Gulcin Gumus & Tracy Regan, 2007. "Self-Employment and the Role of Health Insurance," Working Papers 0910, University of Miami, Department of Economics.
    6. Gumus, Gulcin & Regan, Tracy L., 2015. "Self-employment and the role of health insurance in the U.S," Journal of Business Venturing, Elsevier, vol. 30(3), pages 357-374.
    7. Jun Yeong Lee & John V. Winters, 2022. "State Medicaid Expansion and the Self-Employed," Small Business Economics, Springer, vol. 59(3), pages 925-954, October.
    8. Hossain, Md. Mobarak, 2021. "Relationship Between Health Insurance and Self-employment: A Systematic Review," MPRA Paper 105634, University Library of Munich, Germany.
    9. Bradley Heim, 2015. "Understanding the decline in self-employment among individuals nearing retirement," Small Business Economics, Springer, vol. 45(3), pages 561-580, October.
    10. Lim, Katherine & Michelmore, Katherine, 2018. "The EITC and self-employment among married mothers," Labour Economics, Elsevier, vol. 55(C), pages 98-115.
    11. Frank M. Fossen & Johannes König, 2017. "Public health insurance, individual health, and entry into self-employment," Small Business Economics, Springer, vol. 49(3), pages 647-669, October.
    12. Li, Yajuan & Palma, Marco A. & Towne, Samuel, 2017. "Does Health Insurance Provision Improve Self-Employment and Entrepreneurship? Evidence from State Insurance Mandates," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258399, Agricultural and Applied Economics Association.
    13. Heim, Bradley T. & Lurie, Ithai Z., 2010. "The effect of self-employed health insurance subsidies on self-employment," Journal of Public Economics, Elsevier, vol. 94(11-12), pages 995-1007, December.
    14. Fairlie, Robert W. & Kapur, Kanika & Gates, Susan, 2011. "Is employer-based health insurance a barrier to entrepreneurship?," Journal of Health Economics, Elsevier, vol. 30(1), pages 146-162, January.
    15. Nga Le Thi Quynh & Groot, Wim & Tomini, Sonila M. & Tomini, Florian, 2017. "Effects of health insurance on labour supply: A systematic review," MERIT Working Papers 2017-017, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    16. Le, Nga & Groot, Wim & Tomini, Sonila M. & Tomini, Florian, 2019. "Health insurance and self-employment transitions in Vietnam," MERIT Working Papers 2019-008, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    17. Yu-Chen Kuo & Jia-Huey Lin, 2020. "Picking the lock: how universal healthcare programs influence entrepreneurial activities," Small Business Economics, Springer, vol. 54(1), pages 3-24, January.
    18. Bradley T. Heim & Ithai Z. Lurie, 2014. "DID REFORM OF THE NON‐GROUP HEALTH INSURANCE MARKET AFFECT THE DECISION TO BE SELF‐EMPLOYED? EVIDENCE FROM STATE REFORMS IN THE 1990s," Health Economics, John Wiley & Sons, Ltd., vol. 23(7), pages 841-860, July.
    19. Fossen, Frank M. & Hossain, Mobarak & Mukhopadhyay, Sankar & Toth, Peter, 2021. "The Cost of Health Insurance and Entry into Entrepreneurship," IZA Discussion Papers 14891, Institute of Labor Economics (IZA).
    20. Le, Nga & Groot, Wim & Tomini, Sonila & Tomini, Florian, 2018. "Health insurance and self-employment transitions in Vietnam: A multinomial analysis," MERIT Working Papers 2018-039, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).

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    More about this item

    Keywords

    Health Insurance; Self-Employment;

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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