Premium copayments and the trade-off between wages and employer-provided health insurance

Darren Lubotsky, Craig A. Olson

Research output: Contribution to journalArticlepeer-review


This paper estimates the trade-off between salary and health insurance costs using data on Illinois school teachers between 1991 and 2008 that allow us to address several common empirical challenges in this literature. Teachers paid about 17 percent of the cost of individual health insurance and about 46 percent of the cost of their family members' plans through premium contributions, but we find no evidence that teachers' salaries respond to changes in insurance costs. Consistent with a higher willingness to pay for insurance, we find that premium contributions are higher in districts that employ a higher-tenured workforce. We find no evidence that school districts respond to higher health insurance costs by reducing the number of teachers.

Original languageEnglish (US)
Pages (from-to)63-79
Number of pages17
JournalJournal of Health Economics
StatePublished - Dec 1 2015


  • Compensating wage differences
  • Employer-provided health insurance
  • Premium contributions
  • Public school teachers

ASJC Scopus subject areas

  • Health Policy
  • Public Health, Environmental and Occupational Health


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