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Health Insurance Provision and Labor Market Efficiency in the United States


  • Douglas Holtz-Eakin


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.

Suggested Citation

  • Douglas Holtz-Eakin, 1993. "Health Insurance Provision and Labor Market Efficiency in the United States," NBER Working Papers 4388, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:4388
    Note: HC LS PE

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    References listed on IDEAS

    1. Gustman, Alan L. & Steinmeier, Thomas L., 1993. "Pension portability and labor mobility : Evidence from the survey of income and program participation," Journal of Public Economics, Elsevier, vol. 50(3), pages 299-323, March.
    2. Olivia S. Mitchell, 1983. "Fringe Benefits and the Cost of Changing Jobs," ILR Review, Cornell University, ILR School, vol. 37(1), pages 70-78, October.
    3. Victor R. Fuchs, 1991. "National Health Insurance Revisited," NBER Working Papers 3884, National Bureau of Economic Research, Inc.
    4. Jonathan Gruber, 1992. "The Efficiency of a Group-Specific Mandated Benefit: Evidence From Health Insurance Benefits for Maternity," NBER Working Papers 4157, National Bureau of Economic Research, Inc.
    5. Olivia S. Mitchell, 1982. "Fringe Benefits and Labor Mobility," Journal of Human Resources, University of Wisconsin Press, vol. 17(2), pages 286-298.
    6. Brown, James N & Light, Audrey, 1992. "Interpreting Panel Data on Job Tenure," Journal of Labor Economics, University of Chicago Press, vol. 10(3), pages 219-257, July.
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    Cited by:

    1. Werding, Martin & McLennan, Stuart, 2011. "International portability of health-cost coverage : concepts and experience," Social Protection and Labor Policy and Technical Notes 63929, The World Bank.
    2. Douglas Holtz-Eakin, "undated". "Job-Lock: An Impediment to Labor Mobility? Is Health Insurance Crippling the Labor Market?," Economics Public Policy Brief Archive 10, Levy Economics Institute.
    3. Brigitte C. Madrian, 1994. "Employment-Based Health Insurance and Job Mobility: Is there Evidence of Job-Lock?," The Quarterly Journal of Economics, Oxford University Press, vol. 109(1), pages 27-54.
    4. Kim Sébastien Pham, 1996. "La réforme du système de santé américain : entre assurance et solidarité," Économie et Statistique, Programme National Persée, vol. 291(1), pages 71-85.
    5. 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.

    More about this item

    JEL classification:

    • D6 - Microeconomics - - Welfare Economics
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health


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