There is considerable public policy concern over the relatively low rates of health insurance coverage among the self-employed in the United States. Presumably, the reason for the concern is that their low rates of insurance lead to worse health outcomes. We use data from the Medical Expenditure Panel Survey conducted in 1996 to analyze how the self-employed and wage-earners differ with respect to insurance coverage and health status. Using a variety of ways to measure health status, we find that the relative lack of health insurance among the self-employed does not affect their health. For virtually every subjective and objective measure of health status, the self-employed and wage earners are statistically indistinguishable from each other. Further, we present some evidence that this phenomenon is not due to the fact that individuals who select into self-employment are healthier than wage-earners, ceteris paribus. Thus, the public policy concern with the relative lack of health insurance among the self-employed may be somewhat misplaced.In other words, the self-employed tend to make an informed calculation about the risks to their health and don't waste money on unneeded health-insurance coverage. No doubt many persons who work for others make the same rational calculation.
But if the health-care hysterics on the left had their way, the U.S. government would force health insurance down the throats of everyone, driving up health-care costs and premiums. But it would be "free" because we (as taxpayers) would share the burden. Right.
(Thanks to Alex Tabarrok at Marginal Revolution for the pointer to the abstract.)
