The decline in health insurance and labor market trends

Since the mid-1980s, there has been a reduction in the percentage of workers with employment-based health insurance. In 1993, 68.6 percent of workers had this insurance, compared with 72.9 percent in 1988. The decline was slightly more pronounced among workers obtaining their insurance indirectly, i.e., through someone else's employer. There was a decline in direct employment-based health insurance (coverage through one's own employer) with proportions dropping from 56.1 percent in 1988 to 54.1 percent in 1993. The model used in this analysis identified the factors associated with the decline in employment-based health insurance. The data used were those from the 1989 and 1994 supplements to the Current Population Survey (CPS) conducted by the U.S. Bureau of the Census. The data analyses identified about 55 percent of the factors influencing decreases in employment-based coverage between 1988 and 1993. These factors include decreases in real wages, a small movement toward the use of part-time workers, movements from the goods-producing sector to the service-producing sector, changes in unemployment rates, rising health care costs and the changing racial composition of the work force. The relative proportion each of the factors contributed to the decline, as well as the counterbalancing influence of age, education, firm size, occupation and marital status is discussed.