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Fiscal difficulties of cities, the labor market, and health care

Published online by Cambridge University Press:  19 December 2018

John Hsu ,
Joseph Newhouse ,
Lindsay Nicole Overhage  and
Samuel Zuvekas
John Hsu
Affiliation:
Mongan Institute for Health Policy, Massachusetts General Hospital, Boston, Massachusetts, USA Department of Health Care Policy, Harvard Medical School, Boston, Massachusetts, USA
Joseph Newhouse*
Affiliation:
Department of Health Care Policy, Harvard Medical School, Boston, Massachusetts, USA Harvard Kennedy School, Cambridge, Massachusetts, USA Department of Health Policy and Management, Harvard T.H. Chan School of Public Health, Boston, Massachusetts, USA National Bureau of Economic Research, Cambridge, Massachusetts, USA
Lindsay Nicole Overhage
Affiliation:
Program in Clinical Economics and Policy Analysis, Massachusetts General Hospital, 100 Cambridge St., Suite 1600, Boston, Massachusetts, USA
Samuel Zuvekas
Affiliation:
Agency for Healthcare Research and Quality, Rockville, Maryland, USA
*
*Corresponding author. E-mail: newhouse@hcp.med.harvard.edu
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Abstract

We investigated labor force and health outcomes in cities experiencing fiscal difficulties to assess how those difficulties might impact their employees. We matched 23 cities with bond downgrades and 31 cities with stable bond ratings to sampling units in the Medical Expenditure Panel Survey. Starting the year before the downgrade and for the four subsequent years, the rate of separation from local public employment fell in the cities with downgrades relative to the comparison group. Self-reported health may have worsened, but there were no statistically significant effects on health care use or spending.

Keywords

Healthmunicipal financesmunicipal fiscal difficultiespublic employeesH72H75I12I13J21J26J45J63

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