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Family Health Benefits and Worker Turnover

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Author Info

  • Dan A. Black

    (University of Kentucky)

Abstract

In this paper, I examine the impact of employer-provided health benefits on job turnover. Because many employer-provided plans extend coverage to a worker's entire family, the value of an employer's employment offer to a worker depends on whether the worker's spouse provides the family with health benefits. If a worker's spouse has an employer-provided health insurance for their family, the worker will value employment offers with and without health insurance benefits differently than a worker whose spouse does not have employer-provided health benefits. Importantly, this distortion arises from the reliance on employer-provided benefits and is independent of any pre-existing conditions clauses or issues concerning the portability of health plans. The estimates suggest that spouse-provided benefits substantially increase the likelihood of turnover.

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Bibliographic Info

Paper provided by EconWPA in its series Labor and Demography with number 9604001.

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Date of creation: 01 Apr 1996
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Handle: RePEc:wpa:wuwpla:9604001

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Related research

Keywords: turnover; health insurance; fringe benefits;

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References

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  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, vol. 109(1), pages 27-54, February.
  2. Stephen A. Woodbury & Wei-Jang Huang, 1991. "The Tax Treatment of Fringe Benefits," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number ttfb.
  3. Rebecca A. Luzadis & Olivia S. Mitchell, 1989. "Explaining Pension Dynamics," NBER Working Papers 3084, National Bureau of Economic Research, Inc.
  4. Diamond, Peter, 1992. "Organizing the Health Insurance Market," Econometrica, Econometric Society, vol. 60(6), pages 1233-54, November.
  5. Frank A. Scott & Mark C. Berger & Dan A. Black, 1989. "Effects of the tax treatment of fringe benefits on labor market segmentation," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 42(2), pages 216-229, January.
  6. Jonathan Gruber & Brigitte C. Madrian, 1993. "Limited Insurance Portability and Job Mobility: The Effects of Public Policy on Job-Lock," NBER Working Papers 4479, National Bureau of Economic Research, Inc.
  7. Steven G. Allen & Robert L. Clark & Ann A. McDermed, 1993. "Pensions, Bonding, and Lifetime Jobs," Journal of Human Resources, University of Wisconsin Press, vol. 28(3), pages 463-481.
  8. Mortensen, Dale T, 1988. "Wages, Separations, and Job Tenure: On-the-Job Specific Training or Matching?," Journal of Labor Economics, University of Chicago Press, vol. 6(4), pages 445-71, October.
  9. Alan C. Monheit & Philip F. Cooper, 1994. "Health insurance and job mobility: Theory and evidence," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 48(1), pages 68-85, October.
  10. Hutchens, Robert, 1986. "Delayed Payment Contracts and a Firm's Propensity to Hire Older Workers," Journal of Labor Economics, University of Chicago Press, vol. 4(4), pages 439-57, October.
  11. Woodbury, Stephen A, 1983. "Substitution between Wage and Nonwage Benefits," American Economic Review, American Economic Association, vol. 73(1), pages 166-82, March.
  12. 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.
  13. Long, James E & Scott, Frank A, 1982. "The Income Tax and Nonwage Compensation," The Review of Economics and Statistics, MIT Press, vol. 64(2), pages 211-19, May.
  14. Jonathan Gruber & Alan B. Krueger, 1991. "The Incidence of Mandated Employer-Provided Insurance: Lessons from Workers' Compensation Insurance," NBER Chapters, in: Tax Policy and the Economy, Volume 5, pages 111-144 National Bureau of Economic Research, Inc.
  15. Ippolito, Richard A, 1985. "The Labor Contract and True Economic Pension Liabilities," American Economic Review, American Economic Association, vol. 75(5), pages 1031-43, December.
  16. Gruber, Jonathan, 1994. "The Incidence of Mandated Maternity Benefits," American Economic Review, American Economic Association, vol. 84(3), pages 622-41, June.
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Cited by:
  1. Anja Decressin & Julia Lane & Kristin McCue & Martha Stinson, 2005. "Employer-Provided Benefit Plans, Workforce Composition and Firm Outcomes," Longitudinal Employer-Household Dynamics Technical Papers 2005-01, Center for Economic Studies, U.S. Census Bureau.

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