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Estimating the Relationship between Employer-Provided Health Insurance, Worker Mobility, and Wages

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  • Martha Stinson

Abstract

In this paper, a joint model of wages, hazard of a job ending, and probability of holding employer-provided health insurance is estimated, taking account of unobservable person and job characteristics. A unique data source, the 1990 and 1996 SIPP Panels linked to SSA administrative job histories, enables the identification of random person and job effects and the correlation of these effects across the three equations. The explicit modeling of this correlation produces consistent estimates of the effect of tenure on wages and the effect of health insurance on mobility. Substantial levels of job-lock and significant annual returns to seniority are found. Increasing the job-specific probability of obtaining employerprovided health insurance from 60% to 63%, or increasing the job-specific hourly wage rate by $.80, are both associated with an equivalent decrease in the hazard of the job ending. However, the dollar value of the wage benefit is substantially higher.

Suggested Citation

  • Martha Stinson, 2002. "Estimating the Relationship between Employer-Provided Health Insurance, Worker Mobility, and Wages," Longitudinal Employer-Household Dynamics Technical Papers 2002-23, Center for Economic Studies, U.S. Census Bureau, revised Jun 2003.
    • Handle: RePEc:cen:tpaper:2002-23
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    File URL: https://www2.census.gov/ces/tp/tp-2002-23.pdf
    File Function: Revised version, 2003
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    References listed on IDEAS

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    1. John M. Abowd & Francis Kramarz & David N. Margolis, 1999. "High Wage Workers and High Wage Firms," Econometrica, Econometric Society, vol. 67(2), pages 251-334, March.
    2. Brigitte C. Madrian, 1994. "Employment-Based Health Insurance and Job Mobility: Is there Evidence of Job-Lock?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(1), pages 27-54.
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    5. Kanika Kapur, 1998. "The Impact of Health on Job Mobility: A Measure of Job Lock," ILR Review, Cornell University, ILR School, vol. 51(2), pages 282-298, January.
    6. Abraham, Katharine G & Farber, Henry S, 1987. "Job Duration, Seniority, and Earnings," American Economic Review, American Economic Association, vol. 77(3), pages 278-297, June.
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    Cited by:

    1. Melissa Bjelland, 2005. "Are the Lasting Effects of Employee-Employer Separations induced by Layoff and Disability Similar? Exploring Job Displacement using Survey and Administrative Data," Longitudinal Employer-Household Dynamics Technical Papers 2005-03, Center for Economic Studies, U.S. Census Bureau.
    2. Fredrik Andersson & Iben Bolvig & Matthew Freedman & Julia Lane, 2011. "Lost jobs and health insurance: an analysis of the impact of employment volatility on firm-provided health insurance," Applied Economics, Taylor & Francis Journals, vol. 43(23), pages 3051-3073.

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