TY  - JOUR
AU  - Clemens, Jeffrey
AU  - Cutler, David M
TI  - Who Pays for Public Employee Health Costs?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 19574
PY  - 2013
Y2  - October 2013
DO  - 10.3386/w19574
UR  - http://www.nber.org/papers/w19574
L1  - http://www.nber.org/papers/w19574.pdf
N1  - Author contact info:
Jeffrey Clemens
Department of Economics
University of California, San Diego
9500 Gilman Drive #0508
La Jolla, CA 92093
Tel: 858/534-5713
E-Mail: jeffclemens@ucsd.edu

David M. Cutler
Department of Economics
Harvard University
1875 Cambridge Street
Cambridge, MA  02138
Tel: 617/496-5216
Fax: 617/496-8951
E-Mail: dcutler@harvard.edu
M1  - published as Jeffrey Clemens, David M. Cutler. "Who Pays for Public Employee Health Costs?," in Robert Clark and Joseph Newhouse, organizers, "State and Local Health Plans for Active and Retired Public Employees" Journal of Health Economics, Volume 38 (2014)

M2  - featured in NBER digest on 2014-03-26
M3  - presented at "State and Local Health Plans Conference", August 16-17, 2013
AB  - We analyze the incidence of public-employee health benefits.  Because these benefits are negotiated through the political process, relevant labor market institutions deviate significantly from the competitive, private-sector benchmark.  Empirically, we find that roughly 15 percent of the cost of recent benefit growth was passed onto school district employees through reductions in wages and salaries.  Strong teachers' unions were associated with relatively strong linkages between benefit growth and growth in total compensation.  We further find that when economic conditions are poor, straining public budgets, benefit growth is more readily shifted back to public employees.  Our analysis is consistent with the view that the costs of public workers' benefits are difficult to monitor, contributing to benefit oriented, and often under-funded, compensation schemes.
ER  -