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

“career” jobs either cannot or will not adjust their own work behavior compared
to women in more flexible employment.

Our results are robust to several different specifications, including
different choices of age, different year universes, and a full-veteran interaction.
In addition, results seem to be stronger for women whose husbands are not
working full-time or are not working at all.

We hypothesize that these changes occur because, as found in Boyle
and Lahey (2010), when older men obtain health insurance not linked to their
employment, they are more likely to leave the full-time for-an-employer labor
force, and are thus less likely to be able to provide employer-based insurance to
their families. In addition, older men in career jobs are more likely to have a
choice between working full-time or not working, whereas women of the same
cohort are more likely to be able to provide income from more flexible
employment. Thus, in order to reach a target income or to provide family health
insurance or to self-insure medical expenses, women with a high school education
or less increase their labor supply. This effect comes from both women with less
education increasing their labor force participation and from these women being
less likely to leave the labor force. We do not find any evidence of work
reductions based on complementarity of spousal leisure.

These results differ from the results on retiree health insurance or
COBRA, which found a joint retirement effect for these insurances. However, the

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