The impact of an extension of workers' health insurance on formal employment: Evidence from Ecuador.

• This study analyzes the impact on formal employment caused by the extension of health insurance to formal workers' children. • The impact on formal employment is 2 percentage points, a variation of 8 above the pre-reform level. • The increase of formal employment was driven from unregistered to registered employment. • The impact was greater for parents with younger children. • These results have implications for designing social security reforms. This research focuses on the 2009 and 2010 Ecuadorian reforms that included formal workers' children under 18 years old in the health insurance coverage. The study analyzes the impact on formal Ecuadorian employment caused by the extension of health insurance coverage to the workers' children, using a difference-in-differences approach and repeated cross-sections of household surveys. Evidence reveals that, after the policy reform, individuals who had children were more likely to become formal workers than childless individuals. The impact is about 2 percentage points (about 8% above the pre-reform level). The result was mainly driven from unregistered to registered employment, and by parents with younger children. [ABSTRACT FROM AUTHOR]