Examining Substitution: State Strategies to Limit "Crowd Out" in the Era of Children's Health Insurance Expansions. 3. Types of Employment, Firm Size, and Employee Status


Another major factor underlying the declining rates of employer coverage is the shift of employment from high coverage industries such as manufacturing to lower coverage industries such as service industries. Job market trends toward small business employment, part-time work, and lower-wage industries contribute to the increasing numbers of employees without health insurance. For example, a Minnesota study reported that although most employers contributed to the cost of employee insurance, over 50% stated that they either had not worked long enough or did not work enough hours to be eligible. Nationally, the percentage of workers employed in firms with fewer than 25 employees has increased from 28.5% in 1989 to 30.3% percent in 1994 (29.3% in 1996). In addition, the percentage of workers employed part-time increased from 17.7 % in 1989 to 19.3% in 1994. There has also been an increase in lower wage employees, with the percentage of workers earning less than $250 per week increasing from 22.3 % in 1989 to 25.3% in 1994.