TAX SUBSIDIES AND THE PROVISION OF HEALTH INSURANCE IN SMALL FIRMS

This paper examines the effects of tax subsidies to employer provided health insurance on the distribution of insurance across firms of different sizes. I present a simple model which shows that the tax subsidies may increase the provision of insurance in smaller firms and hence help equalize the distribution of health benefits across firms. I then test this hypothesis using data in both the United States and Canada. My findings indicate that the subsidies reduce the disparity in coverage levels between large and small firms and promote insurance through the workplace instead of on the private market. These findings imply that the tax subsidies may be distorting the labor market by allowing a number of small firms to offer health insurance.

Do Child Tax Benefits Affect the Wellbeing of Children? Evidence from Canadian Child Benefit Expansions

A vast literature has examined the impact of family income on the health and development outcomes of children. One channel through which increased income may operate is an improvement in a family’s ability to provide food, shelter, clothing, books, and other expenditure-related inputs to a child’s development. In addition to this channel, many scholars have investigated the relationship between income and the psychological wellbeing of the family. By reducing stress and conflict, more income helps to foster an environment more conducive to healthy child development. In this paper, we exploit changes in child benefits in Canada to study these questions. Importantly, our approach allows us to make stronger causal inferences than has been possible with the existing, mostly correlational, evidence. Using variation in child benefits across province, time, and family type, we study outcomes spanning test scores, mental health, physical health, and deprivation measures. The findings suggest that child benefit programs in Canada had significant positive effects on test scores, as has been featured in the existing literature. However, we also find that several measures of both child and maternal mental health and well-being show marked improvement with higher child benefits. We find strong and interesting differences in the effects of benefits by sex of the child: benefits have stronger effects on educational outcomes and physical health for boys, and on mental health outcomes for girls. Our findings also provide some support for the hypothesis that income transfers operate through measures of family emotional well-being.Child Tax Benefits, Income Transfers, Child Development, Standardized Tests, Mental Health

Tax Credits and the Use of Medical Care

Several recent proposals have advocated using the income tax system to collect user fees to help fund the health care system. While there is a considerable amount of research investigating both how individuals respond to tax incentives for employer provided health insurance and on the effects of user fees payable at the point of service on the use of health care services, there is limited evidence on how individuals respond to tax incentives when these are not realized until taxes are paid. This paper uses existing exemptions in the Canadian tax code that allow individuals to deduct the cost of health care or health insurance from their taxable income in order to identify the tax price elasticity of demand for health care when price changes are realized at the end of the tax year. Our results suggest that despite not realizing the tax benefit at the time of purchase, individuals are quite responsive to changes in the tax price of health care. Our elasticity estimates for a wide range of health care products are well within the range of traditional price elasticity estimates, including in particular our estimates for prescription drugs. We also find some evidence that suggests individuals trade off risk sharing through traditional insurance companies with risk sharing through the tax code. That is, as the tax price of health care decreases, individuals spend more on health care, but spend less on health insurance.

Socioeconomic Status and Health: Why is the Relationship Stronger for Older Children?

Case, Lubotsky, and Paxson (2001) show that the well-known relationship between socio- economic status (SES) and health exists in childhood and grows more pronounced with age. However, in cross-sectional data it is difficult to distinguish between two possible explanations. The first is that low-SES children are less able to respond to a given health shock. The second is that low SES children experience more shocks. We show, using panel data on Canadian children that: 1) the gradient we estimate in the cross section is very similar to that estimated previously using U.S. children; 2) both high and low-SES children recover from past health shocks to about the same degree; and 3) that the relationship between SES and health grows stronger over time mainly because low-SES children receive more negative health shocks. In addition, we examine the effect of health shocks on math and reading scores. We find that health shocks affect test scores and future health in very similar ways. Our results suggest that public policy aimed at reducing SES-related health differentials in children should focus on reducing the incidence of health shocks as well as on reducing disparities in access to palliative care.

Child Mental Health and Human Capital Accumulation: The Case of ADHD

One in five U.S. youngsters has a mental disorder, but we know little about the effects of these disorders on outcomes. We examine U.S. and Canadian children with symptoms of Attention Deficit Hyperactivity Disorder (ADHD), the most common child mental health problem. Our innovations include the use of large nationally representative samples of children, the use of questions administered to all children rather than focusing only on diagnosed cases, and the use of sibling fixed effects to control for omitted variables. We find large negative effects on test scores and schooling attainment suggesting that mental health conditions are a more important determinant of average outcomes than physical health conditions.

Do Child Tax Benefits Affect the Wellbeing of Children? Evidence from Canadian Child Benefit Expansions

A vast literature has examined the impact of family income on the health and development outcomes of children. One channel through which increased income may operate is an improvement in a family's ability to provide food, shelter, clothing, books, and other expenditure-related inputs to a child's development. In addition to this channel, many scholars have investigated the relationship between income and the psychological wellbeing of the family. By reducing stress and conflict, more income helps to foster an environment more conducive to healthy child development. In this paper, we exploit changes in child benefits in Canada to study these questions. Importantly, our approach allows us to make stronger causal inferences than has been possible with the existing, mostly correlational, evidence. Using variation in child benefits across province, time, and family type, we study outcomes spanning test scores, mental health, physical health, and deprivation measures. The findings suggest that child benefit programs in Canada had significant positive effects on test scores, as has been featured in the existing literature. However, we also find that several measures of both child and maternal mental health and well-being show marked improvement with higher child benefits. We find strong and interesting differences in the effects of benefits by sex of the child: benefits have stronger effects on educational outcomes and physical health for boys, and on mental health outcomes for girls.wellbeing,child tax,child benefits, health outcomes

The Integration of Child Tax Credits and Welfare: Evidence from the National Child Benefit Program

In 1998, the Canadian government introduced a new child tax credit. The innovation in the program was its integration with social assistance (welfare). Some provinces agreed to subtract the new federally-paid benefits from provincially-paid social assistance, partially lowering the welfare wall. Three provinces did not integrate benefits, providing a quasi-experimental framework for estimation. We find large changes in social assistance take-up and employment in provinces that provided the labour market incentives to do so. In our sample, the integration of benefits can account for around one third of the total decline in social assistance receipt between 1997 and 2000.

Household Responses to Public Home Care Programs

A choice-theoretic model of household decision-making with respect to care-giving time allocations and the use of publicly and privately financed home care services is proposed. Predictions concerning the effect of increased availability of publicly financed home care services on home care utilization, informal care-giving, and health status are derived. These predictions are assessed through use of Canadian inter-provincial survey data on home care use and care-giving that are matched with data on home care funding for the period 1992 to 1998. Increased availability of publicly financed home care is associated with an increase in its utilization and a decline in informal care-giving, with this effect more pronounced among lower income Canadians. While self-reported health status was positively correlated with the increased availability of publicly financed home care, the perceived need for home care was invariant to this change.

Migration in health care

Migration. That’s the biggest challenge from my point of view. So let me pull out some thoughts on some of the different legal perspectives on the interface between health and human migration