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

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