The Impact of National Health Insurance on Labor Force Participation of Older Men in Taiwan

Abstract

The labor force participation rates of older men in Taiwan have dropped_x000D_ substantially over the last decade. Previous studies show that the implementation of_x000D_ the National Health Insurance (NHI) program in 1995 accounts for a decline in_x000D_ female labor force participation. In this paper, we use the difference-in-difference_x000D_ method to evaluate whether the availability of subsidized NHI affects the labor force_x000D_ participation of older men. Our empirical results show a mixed picture. For_x000D_ poorly-educated men, the NHI has a positive and significant effect on their labor_x000D_ force participation, which is inconsistent with the findings for female labor_x000D_ participation. One possible reason is that the employers with no incentive to share_x000D_ the cost of NHI reduced the employment of full-time workers and hired more_x000D_ temporary workers instead. As a result, the labor force participation rates of_x000D_ poorly-educated older men, who are more likely to become temporary workers, have_x000D_ increased. However, the price is the heavy financial burden on Taiwan’s government._x000D_ On the other hand, the labor force participation rate has declined for highly-educated_x000D_ men. The decrease is more significant for men whose wives are not working than for_x000D_ those who are working in the private sector. This implies that the leisure times of_x000D_ husbands and wives may be complementary.