Health Benefits Lower U.S. Labor Supply

A new NBER paper finds that about half of the historical gap in hours worked between Americans and non‑Americans has closed; the main driver in the United States is the post‑2000 expansion of government health benefits available to the non‑employed, which reduced hours per person. In contrast, many other wealthy countries already offered employment‑independent coverage, so their rising hours reflect wages and changing work preferences instead. — If detaching health coverage from employment reduces hours worked, policymakers need to weigh the labor‑market tradeoffs when designing universal or employer‑independent health programs.