This paper identifies and, where possible, quantifies potential labor market consequences
of government mandating of employee benefits. The author argues that mandating benefits could
increase benefit coverage and generosity for numerous workers and their families. However, even
when mandating benefits does improve benefit provision, there will be offsetting effects including
wage and other benefit cuts, reduced work hours, reduced employment, and possibly output
reductions in covered sectors. Employer bias against "expensive to insure" workers may also
result, producing labor market sorting and segmentation. In addition, many workers currently
without benefit coverage are employees of small firms, women, pan-time and minimum wage
workers. Frequently, mandated benefit proposals exclude or reduce coverage for these workers to
alleviate the financial burden on smaIl firms. As a result, many uninsured people will not be helped
by the type of mandated employee benefit program currendy under review. A separate approach
would probably be needed to meet the needs of those not covered by mandated benefit programs.
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