The effects of private versus public health insurance on health and labor market outcomes

Among health care systems with both public and private elements (such as in the US and Germany), an important question is whether the type of health insurance exerts an impact on workers' careers. We exploit the unique German case of a two-tier health care system to analyze whether opting out of public statutory health insurance and into private health insurance affects the specific health and employment outcomes of employed workers over a period of nine years. We exploit administrative registers and apply a fuzzy regression discontinuity design. We do not find any evidence that the type of health insurance affects employed workers' outcomes in the medium or long run. This suggests that even though private health insurance entails more comfortable healthcare conditions, public health insurance does not come with heavy health impairments or detrimental employment outcomes.