Suppose the government requires firms to buy insurance against hair loss for their employees. Workers will end up paying for this coverage in the form of lower wages.

Question

Quizplus · Accepted Answer

When firms are required to purchase insurance for their employees, they will likely pass on the cost of the coverage to their workers in the form of lower wages. This is because the cost of the insurance will cut into the firm's profits, which they will try to make up through lower labor costs.

Suppose the Government Requires Firms to Buy Insurance Against Hair