Immigrants and Employer-Provided Health Insurance

Thomas C. Buchmueller, University of Michigan

Abstract

Objective: To investigate the factors underlying the lower rate of employer-sponsored health insurance coverage for foreign-born workers.

Data Sources: 2001 Survey of Income and Program Participation.

Study Design: We estimate probit regressions to determine the effect of immigrant status on employer sponsored health insurance coverage, including the probabilities of working for a firm that offers coverage, being eligible for coverage, and taking up coverage.

Data Extraction Methods: We identified native born citizens, naturalized citizens, and non-citizen residents between the ages of 18 and 65, in the year 2002.

Principal Findings: First, we find that the large difference in coverage rates for immigrants and native-born Americans is driven by the very low rates of coverage for non-citizen immigrants. Differences between native-born and naturalized citizens are quite small and for some outcomes are statistically insignificant when we control for observable characteristics. Second, our results indicate that the gap between natives and non-citizens is explained mainly by differences in the probability of working for a firm that offers insurance. Conditional on working for such a firm, non-citizens are only slightly less likely to be eligible for coverage and, when eligible, are only slightly less likely to take up coverage. Third, roughly two-thirds of the native/non-citizen gap in coverage overall and in the probability of working for an insurance-providing employer is explained by characteristics of the individual and differences in the types of jobs they hold.

Conclusions: The substantially higher rate of uninsurance among immigrants is driven by the lower rate of health insurance offers by the employers of immigrants.