THE LABOR-MARKET EFFECTS OF INTRODUCING NATIONAL-HEALTH INSURANCE - EVIDENCE FROM CANADA

Although national health insurance (NHI) plans in the United States are often opposed on the basis of their potential disemployment effects, there is no existing evidence on the effects of NHI on employment. We provide such evidence by examining the employment consequences of NHI in Canada, using the fact that NHI was introduced on a staggered basis across Canadian provinces. We examine monthly data on employment, wages, and hours across 8 industries and 10 provinces over the 1961-1975 period. We find that employment rose after the introduction of NHI; wages increased as well, and average hours were unchanged. In addition, we find lower rates of employment and wage growth after introduction of NHI in provinces that financed NHI with general revenues rather than lump-sum premiums and lower rates of wage growth in provinces with high initial levels of private insurance coverage.