This paper examines how private, employer-sponsored health insurance and publicly provided health insurance affect the distribution of income among families in 1989 and 1992. Data are drawn from the March 1990 and 1993 Current Population Surveys (CPS). Information on the value of employer-sponsored health insurance and on Medicaid comes from the Urban Institute's TRIM2 microsimulation model. The analysis focuses on nonelderly households with children and documents changes in median cash income for one- and two-parent families, dividing them according to racial/ethnic affiliation. It establishes trends in cash income inequality among racial/ethnic groups and examines the effect of health benefits on inequality both within and among the groups.
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