Has There Been a Shift to Small Firms? The Impact of Firm Size on Employment-Based Health Benefits

This paper examines changes in the distribution of workers among different size firms and the resulting impact on employment-based health benefits. Small firms account for much of the new job growth in the United States. However, the percentage of workers in firms with fewer than 500 employees has declined slightly between the 1980s and today. In addition, workers in small firms are much less likely to have health benefits than workers in large firms. There has been a decline in the probability that a worker had employment-based health benefits between 1987 and 2002 across nearly all firm sizes. Only in firms with fewer than 25 employees did the percentage of workers with employment-based health benefits from their own employer not decline, increasing slightly from 30 percent to 30.8 percent over the period. The PDF for the above title, published in the August 2004 issue of EBRI Notes, also contains the fulltext of another August 2004 EBRI Notes article abstracted on SSRN: "IRA and Keogh Assets and Contributions."