Employer investments in employee health implications for the family as health producer.

The model presented in this paper further extends the demand-for-health model in which the family is the producer of health investments, to consider the case in which an employer has incentives for investing in the health of a family member. The household and the employer are assumed to interact strategically in the production of health. The general insight provided is that the conditions which determine the nature of the relationship between the employer and the employee, for instance market conditions, production technologies, taxes, and government regulation, will also affect the allocation of health investments and health capital within the family.