English Language, Skills, and Health Benefits

Nan L. Maxwell, California State University, Hayward
Lynn Paringer, California State University, Hayward

This paper shows that because a firm’s decision to offer insurance to low-skilled workers is dynamic and grounded its compensation policies, firms select the mix of workers and restrictions placed an offer of health benefits in response to market forces. We support this proposition using two databases of California workers (California Work and Health Surveys) and firms (Bay Area Longitudinal Surveys). Although the offer of health benefits is rarely rescinded over time, the firm changes its criteria for receiving benefits as labor market forces alter the availability of workers. We show that firms base health benefit offers on the skills of workers, even in jobs that require relatively few skills. Of particular note, low-skill workers with English language skills are significantly more likely to be offered a job in a firm offering health benefits than low-skill workers that do not possess such skills.