Excerpt: It is well-known that highly-paid workers are more likely to receive employer health insurance offers. Many of the studies available on the salaries and fringe benefits of workers do not show how the salaries of a group of co-workers influence an employer's decision to offer insurance. For example, even if most employees in a firm earn low wages, employers may still decide to offer health benefits if they also employ a few higher-wage workers in the same establishment who value this coverage. This paper addresses this question by showing how the offer of employer health insurance differs depending on the distribution of worker earnings within an establishment.

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