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Health Insurance Provision and Labor Market Efficiency in the United States

  • Douglas Holtz-Eakin
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    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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    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
    Note: HC LS PE
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    National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.

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    1. Alan Gustman & Thomas Steinmeier, 1990. "Pension Portability and Labor Mobility: Evidence From the Survey of Income and Program Participation," NBER Working Papers 3525, National Bureau of Economic Research, Inc.
    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. 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.
    4. Olivia S. Mitchell, 1982. "Fringe Benefits and Labor Mobility," Journal of Human Resources, University of Wisconsin Press, vol. 17(2), pages 286-298.
    5. Olivia S. Mitchell, 1983. "Fringe benefits and the cost of changing jobs," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 37(1), pages 70-78, October.
    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 219-57, July.
    7. Victor R. Fuchs, 1991. "National Health Insurance Revisited," NBER Working Papers 3884, National Bureau of Economic Research, Inc.
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