Who bears the burden of social insurance? Evidence from Japanese health and long-term care insurance data

Abstract

Komamura, Kohei, and Yamada, Atsuhiro-Who bears the burden of social insurance? Evidence from Japanese health and long-term care insurance data Using the society-managed health insurance data, which is cross-sectional time-series and covers 1670 health insurance societies for seven years (FY1995-2001), we found for the first time in Japan that the majority of the employers' contribution to health insurance is shifting back onto the employees in the form of wage reduction. On the other hand, we cannot find such evidence for the contribution to long-term care insurance using a two-year (FY2000-2001) panel data set. The difference can be theoretically explained by how employees value the contribution relative to social security benefits they enjoy.

How Do Japanese Health Insurance Societies Finance Their Contributions to the Health Service Systems for the Elderly?*

“…In other words, the wage is a source of variation in the total premium but has no direct effect on the employee's premium, the employer's premium or the contribution. In research into the incidence of social insurance premium on wages, however, Komamura and Yamada (2004) claimed that a higher premium rate for employers caused lower wages. They did this by regressing remuneration on the employer's premium rate to examine whether cost‐shifting to employees had occurred using firm‐level micro data over the period 1997 to 2002.…”

“…If this is true, the errors in the second stage in our 2SLS may be correlated with the wage. However, as Iwamoto and Hamaaki (2006) suggest, the analysis in Komamura and Yamada (2004) suffers from an upward bias in that the employer's premium rate is likely to be lower for firms with higher remuneration under the premium determination scheme. In fact, we can see from Figure 2 that the average wage has consistently increased from 1998 to 2002 (except for 2002) coincidently with the employer's premium rate.…”

“…2 2 Komamura and Yamada (2004) discuss the public health insurance system for employees along with insurance for government officers and mariners as well as municipality‐based insurance. …”

Reputational Incentives—How Improving Transparency Can Drive Hospital Competition

“…130 These contributions are frequently insufficient to operate the insurance plans. In 2003, more than half lost money.…”

The Estimation of the Incidence of Employer Contributions to Social Security in Japan*

“…social insurance) in Japan. One exception is the study by Komamura and Yamada (2004) on health and long-term care insurance. The degree of the incidence is extremely important in the process of social security policy reform, because firms contribute an equal share as their employees to social security systems.…”