Who Gets What From Employer Pay or Play Mandates?

Authors

  • Richard V. Burkhauser,

    1. Richard V. Burkhauser is the Sarah Gibson Blanding Professor, Cornell University; phone: (607) 255-2097; fax: (607) 255-4071; e-mail: rvb1@cornell.edu. Kosali I. Simon is an assistant professor in the Department of Policy Analysis and Management, Cornell University; tel: 607/255-7103; fax: 607/255-4071; e-mail: kis6@cornell.edu. This study was funded in part by the Employment Policies Institute through a grant to Cornell University. We thank Linda Blumberg, Sherry Glied, Emily Owens, and Will White for their comments on previous drafts of this article and Jessica O'Day for her editing help. The views expressed here do not necessary reflect the views of Cornell University or the Employment Policies Institute.
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  • Kosali I. Simon

    1. Richard V. Burkhauser is the Sarah Gibson Blanding Professor, Cornell University; phone: (607) 255-2097; fax: (607) 255-4071; e-mail: rvb1@cornell.edu. Kosali I. Simon is an assistant professor in the Department of Policy Analysis and Management, Cornell University; tel: 607/255-7103; fax: 607/255-4071; e-mail: kis6@cornell.edu. This study was funded in part by the Employment Policies Institute through a grant to Cornell University. We thank Linda Blumberg, Sherry Glied, Emily Owens, and Will White for their comments on previous drafts of this article and Jessica O'Day for her editing help. The views expressed here do not necessary reflect the views of Cornell University or the Employment Policies Institute.
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Abstract

Critics of pay or play mandates, borrowing from the large empirical minimum wage literature, argue that they reduce employment. Borrowing from a smaller empirical minimum wage literature, we argue that they also are a blunt instrument for funding health insurance for the working poor. The vast majority of those who benefit from pay or play mandates, which require employers to either provide appropriate health insurance for their workers or pay a flat per hour tax to offset the cost of health care live in families with incomes twice the poverty line or more, and depending on how coverage is determined, the mandate will leave a significant share of the working poor ineligible for such benefits either because their hourly wage rate is too high or they work for smaller exempt firms.

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