Minimum Wages, Employer-Provided Health Insurance, and the Non-discrimination Law

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Abstract

This article exploits cross-state variation in minimum wages to investigate the impact of minimum wage changes on employer-provided health insurance. In contrast to the existing empirical literature, this article considers an environment where some firms are constrained by non-discrimination laws that govern the provision of health insurance. For these firms, minimum wage changes do not reduce the probability that workers will receive employer-provided health insurance. For firms not covered by the non-discrimination law, and free to tailor their fringe benefits, low-skilled workers experience a disproportionate reduction in the availability and generosity of health insurance after a minimum wage increase.

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