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Health Insurance Provision and Labor Market Efficiency in the United States

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  • Douglas Holtz-Eakin
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    Abstract

    Health Insurance has claimed a prominent place on the policy agenda in the United States. Critics argue that the status quo has lead to spiraling health care costs, an inequitable distribution of quality medical care, and that employer-provided health insurance has "locked" individuals into jobs, thereby interfering with the efficient matching of employers and employees. In contrast to the United States, Germany guarantees virtually all citizens health insurance. Insurance is portable, but the cost may change when an individual changes jobs, again leading to the potential for job-lock. This paper assesses the empirical magnitude of health insurance-related impediments to job mobility in the United States and Germany, The results show little evidence that health insurance provision interferes with job mobility in either the United States or Germany, thus suggesting that these employer-based systems for providing the health insurance portion of the social safety net do not alter this aspect of labor market efficiency.

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    File URL: http://www.nber.org/papers/w4388.pdf
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    Bibliographic Info

    Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 4388.

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    Date of creation: Jun 1993
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    Publication status: published as Douglas Holtz-Eakin, 1994. "Health Insurance Provision and Labor Market Efficiency in the United States and Germany," NBER Chapters, in: Social Protection versus Economic Flexibility: Is There a Trade-Off?, pages 157-188 National Bureau of Economic Research, Inc.
    Handle: RePEc:nbr:nberwo:4388

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    Cited by:
    1. Madrian, Brigitte C, 1994. "Employment-Based Health Insurance and Job Mobility: Is There Evidence of Job-Lock?," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 109(1), pages 27-54, February.
    2. Gruber, J. & Madrian, B.C., 1994. "Limited Insurance Portability and Job Mobility: The Effects of Public Policy on Job-Lock," Working papers, Massachusetts Institute of Technology (MIT), Department of Economics 94-03, Massachusetts Institute of Technology (MIT), Department of Economics.
    3. Douglas Holtz-Eakin, . "Job-Lock: An Impediment to Labor Mobility? Is Health Insurance Crippling the Labor Market?," Economics Public Policy Brief Archive, Levy Economics Institute 10, Levy Economics Institute.
    4. Werding, Martin & McLennan, Stuart, 2011. "International portability of health-cost coverage : concepts and experience," Social Protection Discussion Papers, The World Bank 63929, The World Bank.

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