ABSTRACT
Fringe benefits that are voluntarily provided by employers have been a significant part of total compensation in the United States. The links between provision of benefits and labor-market adjustments suggest the importance of examining the extent of benefit coverage, the determinants of benefit coverage, and changes in that coverage. This chapter utilizes the 1979 and 1988 May Benefits Supplements to the Current Population Survey to examine the pattern of benefit provision. It examines the degree to which changes in observable characteristics can explain the drop in benefit provision that occurred. The variation in benefit coverage across occupations is somewhat less striking than the variation across industries. Consider the response of benefit coverage to changes in the tax-price of benefits. The health-insurance simulation based on the 1988 model points to the same factors in explaining the drop in health-insurance coverage. Union membership dramatically increases the probability of benefit coverage, and the relationship is again stronger for pensions than for health insurance.
