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Health Insurance and the Supply of Entrepreneurs

  • Douglas Holtz-Eakin
  • John R. Penrod
  • Harvey S. Rosen

Some commentators have suggested that the absence of portable health insurance impedes people from leaving their jobs to start new firms. We investigate this belief by comparing wage-earners who become self-employed during a given period of time with their counterparts who do not. By examining the impact of variables relating to the health insurance and health status of these workers and their families, we can infer whether the lack of health insurance portability affects the probability that they become self-employed. The evidence does not support the conjecture that the current health insurance system affects the propensity to become self-employed. Hence, whatever its other merits, there is no reason to believe that the introduction of universal health insurance would significantly enhance entrepreneurial activity.

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File URL: http://www.nber.org/papers/w4880.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 4880.

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Date of creation: Oct 1994
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Publication status: published as Journal of Public Economics, vol. 62, no. 1-2, pp. 209-235, (1996)
Handle: RePEc:nbr:nberwo:4880
Note: HC LS
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  1. Douglas Holtz-Eakin & David Joulfaian & Harvey Rosen, 1992. "Entrepreneurial Decisions and Liquidity Constraints," Working Papers 679, Princeton University, Department of Economics, Industrial Relations Section..
  2. Jonathan Gruber & Brigitte C. Madrian, 1994. "Health Insurance and Job Mobility: The Effects of Public Policy on Job-Lock," ILR Review, Cornell University, ILR School, vol. 48(1), pages 86-102, October.
  3. Evans, David S & Jovanovic, Boyan, 1989. "An Estimated Model of Entrepreneurial Choice under Liquidity Constraints," Journal of Political Economy, University of Chicago Press, vol. 97(4), pages 808-27, August.
  4. Bruce D. Meyer, 1990. "Why Are There So Few Black Entrepreneurs?," NBER Working Papers 3537, National Bureau of Economic Research, Inc.
  5. Evans, David S & Leighton, Linda S, 1989. "Some Empirical Aspects of Entrepreneurship," American Economic Review, American Economic Association, vol. 79(3), pages 519-35, June.
  6. Gruber, J., 1992. "State Mandated Benefits and Employer Provided Health Insurance," Working papers 92-18, Massachusetts Institute of Technology (MIT), Department of Economics.
  7. 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.
  8. Gruber, J. & Madrian, B.C., 1994. "Limited Insurance Portability and Job Mobility: The Effects of Public Policy on Job-Lock," Working papers 94-03, Massachusetts Institute of Technology (MIT), Department of Economics.
  9. 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.
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