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Job Lock: Evidence from a Regression Discontinuity Design

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Author Info

  • Fairlie, Robert W.

    ()
    (University of California, Santa Cruz)

  • Kapur, Kanika

    ()
    (University College Dublin)

  • Gates, Susan

    ()
    (RAND)

Abstract

Employer-provided health insurance may restrict job mobility, resulting in "job lock." Previous research on job lock finds mixed results using several methodologies. We take a new approach to examine job-lock by exploiting the discontinuity created at age 65 through the qualification for Medicare. Using a novel procedure for identifying age in months from matched monthly CPS data and a relatively unexplored administration measure of job mobility, we compare job mobility among male workers in the months just prior to turning age 65 to job mobility in the months just after turning age 65. We find no evidence that job mobility increases at the age 65 threshold when Medicare eligibility starts. We also do not find evidence that other factors such as retirement, reduction in hours worked, social security eligibility, pension eligibility, and sample changes confound the results on job mobility in the month individuals turn 65.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7785.

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Length: 65 pages
Date of creation: Nov 2013
Date of revision:
Handle: RePEc:iza:izadps:dp7785

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Keywords: job lock; health insurance; Medicare;

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References

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  1. Scott J. Adams, 2004. "Employer-provided Health Insurance and Job Change," Contemporary Economic Policy, Western Economic Association International, vol. 22(3), pages 357-369, 07.
  2. Kevin T. Stroupe & Eleanor D. Kinney & Thomas J.J. Kniesner, 2001. "Chronic Illness and Health Insurance-Related Job Lock," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 20(3), pages 525-544.
  3. David Card & Carlos Dobkin & Nicole Maestas, 2007. "Does Medicare Save Lives?," NBER Working Papers 13668, National Bureau of Economic Research, Inc.
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  7. Madrian, Brigitte C, 1994. "Employment-Based Health Insurance and Job Mobility: Is There Evidence of Job-Lock?," The Quarterly Journal of Economics, MIT Press, vol. 109(1), pages 27-54, February.
  8. Bruce Fallick & Charles A. Fleischman, 2004. "Employer-to-employer flows in the U.S. labor market: the complete picture of gross worker flows," Finance and Economics Discussion Series 2004-34, Board of Governors of the Federal Reserve System (U.S.).
  9. Cynthia Bansak & Steven Raphael, 2008. "The State Children's Health Insurance Program and Job Mobility: Identifying Job Lock among Working Parents in Near-Poor Households," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 61(4), pages 564-579, July.
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  11. Guido Imbens & Thomas Lemieux, 2007. "Regression Discontinuity Designs: A Guide to Practice," NBER Technical Working Papers 0337, National Bureau of Economic Research, Inc.
  12. Robert W Fairlie & Kanika Kapur & Susan Gates, 2010. "Is Employer-Based Health Insurance a Barrier to Entrepreneurship?," Working Papers 200903, School Of Economics, University College Dublin.
  13. Bruce Fallick & Charles A. Fleischmann & James B. Rebitzer, 2005. "Job Hopping in Silicon Valley: Some Evidence Concerning the Micro-Foundations of a High Technology Cluster," NBER Working Papers 11710, National Bureau of Economic Research, Inc.
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  18. Lee, David S. & Card, David, 2008. "Regression discontinuity inference with specification error," Journal of Econometrics, Elsevier, vol. 142(2), pages 655-674, February.
  19. Kanika Kapur, 1998. "The Impact of health on job mobility: A measure of job lock," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 51(2), pages 282-298, January.
  20. Royalty, Anne Beeson & Abraham, Jean M., 2006. "Health insurance and labor market outcomes: Joint decision-making within households," Journal of Public Economics, Elsevier, vol. 90(8-9), pages 1561-1577, September.
  21. Hamersma, Sarah & Kim, Matthew, 2009. "The effect of parental Medicaid expansions on job mobility," Journal of Health Economics, Elsevier, vol. 28(4), pages 761-770, July.
  22. Anna Sanz-de-Galdeano, 2006. "Job-lock and public policy: Clinton's second mandate," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 59(3), pages 430-437, April.
  23. Jonathan Gruber & Brigitte C. Madrian, 1994. "Health insurance and job mobility: The effects of public policy on job-lock," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 48(1), pages 86-102, October.
  24. Richard W. Johnson & Amy J. Davidoff & Kevin Perese, 2003. "Health insurance costs and early retirement decisions," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 56(4), pages 716-729, July.
  25. Nicole Maestas & Julie Zissimopoulos, 2010. "How Longer Work Lives Ease the Crunch of Population Aging," Journal of Economic Perspectives, American Economic Association, vol. 24(1), pages 139-60, Winter.
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