Health Insurance and the Labor Supply Decisions of Older Workers: Evidence from the U.S. Department of Veterans Affairs
AbstractThis paper exploits a major mid-1990s expansion in the U.S. Department of Veterans Affairs health care system to provide evidence on the labor market effects of expanding health insurance availability. Using data from the Current Population Survey, we compare the labor market behavior of older veterans and non-veterans before and after the VA health benefits expansion to test the impact of public health insurance on labor supply. We find that older workers are significantly more likely to decrease work both on the extensive and intensive margins after receiving access to non-employer based insurance. Older workers are also more likely to leave self-employment, a result inconsistent with "job-lock" effects of employer-based insurance, but consistent with a positive income effect from new access to public insurance. Some relatively disadvantaged subpopulations, however, may increase their labor supply after gaining greater access to public insurance, consistent with complementary positive health effects of health care access for these groups. We conclude that this reform has affected employment and retirement decisions, and suggest that future moves toward universal coverage or expansions of Medicare are likely to have significant labor market effects. To illustrate, we calculate that as much as 10% of the difference in retirement rates in the US and Canada may be due to Canada's provision of universal health care.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by College of the Holy Cross, Department of Economics in its series Working Papers with number 0801.
Length: 27 pages
Date of creation: Jan 2008
Date of revision:
Contact details of provider:
Fax: (508) 793-3708
Web page: http://www.holycross.edu/departments/economics/website/
More information through EDIRC
labor supply; job-lock; retirement; older workers; health insurance; VA; Medicare; veteran;
Other versions of this item:
- Melissa A. Boyle & Joanna N. Lahey, 2007. "Health Insurance and the Labor Supply Decisions of Older Workers: Evidence from the U.S. Department of Veterans Affairs," Working Papers, Center for Retirement Research at Boston College wp2007-23, Center for Retirement Research, revised Dec 2007.
- J2 - Labor and Demographic Economics - - Demand and Supply of Labor
- I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
This paper has been announced in the following NEP Reports:
- NEP-AGE-2008-02-23 (Economics of Ageing)
- NEP-ALL-2008-02-23 (All new papers)
- NEP-HEA-2008-02-23 (Health Economics)
- NEP-IAS-2008-02-23 (Insurance Economics)
- NEP-LAB-2008-02-23 (Labour Economics)
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Robert W Fairlie & Kanika Kapur & Susan Gates, 2012.
"Job Lock: Evidence from a Regression Discontinuity Design,"
201215, School Of Economics, University College Dublin.
- Fairlie, Robert W. & Kapur, Kanika & Gates, Susan, 2013. "Job Lock: Evidence from a Regression Discontinuity Design," IZA Discussion Papers 7785, Institute for the Study of Labor (IZA).
- Fairlie, Robert, 2014. "Job Lock: Evidence from a Regression Discontinuity Design," Santa Cruz Department of Economics, Working Paper Series qt4947535x, Department of Economics, UC Santa Cruz.
- Vincent Touzé, 2010.
"Le système de retraite américain : impact de la crise et tendances de long terme,"
Documents de Travail de l'OFCE
2010-27, Observatoire Francais des Conjonctures Economiques (OFCE).
- Vincent Touze, 2010. "Le système de retraite américain : impact de la crise et tendances de long terme," Sciences Po publications 2010-27, Sciences Po.
- Catherine Mathieu & Vincent Touze & Henri Sterdyniak & Gerard Cornilleau, 2010.
"Les réformes des retraites en Europe dans la crise,"
Sciences Po publications
2010-17, Sciences Po.
- Gérard Cornilleau & Catherine Mathieu & Henri Sterdyniak & Vincent Touzé, 2010. "Les réformes des retraites en Europe dans la crise," Documents de Travail de l'OFCE 2010-17, Observatoire Francais des Conjonctures Economiques (OFCE).
- repec:spo:wpecon:info:hdl:2441/5l6uh8ogmqildh09h8492c58l is not listed on IDEAS
- repec:spo:wpecon:info:hdl:2441/eu4vqp9ompqllr09hai2o91j4 is not listed on IDEAS
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Victor Matheson).
If references are entirely missing, you can add them using this form.