Spousal Labor Market Effects from Government Health Insurance: Evidence from a Veterans Affairs Expansion

receiving health insurance through her husband’s job but he has been offered
public health insurance, it may make sense for the wife to seek employment
options that enable her to obtain her own employer-provided insurance, such as
by increasing her hours to full-time or obtaining a new job with health insurance
coverage. Alternatively, she might increase her work hours or seek a higher-
paying position in order to pay for her own health insurance out-of-pocket.
Therefore, we would expect to see a larger positive effect on labor market
outcomes for women who did not have employer-provided health insurance of
their own in the previous year.

On the other hand, because retirement is often a joint decision, we might
also expect a woman’s labor force participation to decrease when her husband’s
decreases. Because of potential complementarity of spousal leisure, the value of
the wife’s leisure time may increase when her husband retires.⁶ Therefore a
husband’s receipt of insurance would correspond to decreased work outcomes for
the wife as well.

Results may also vary by education because of the different opportunities
that are available for women of differing education levels. For example, women
with less education may be better able than more educated women to control their

⁶ See Coile 2004 for a discussion of this with respect to Social Security and private pension
receipt.

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