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The Impact of Employer-Provided Health Insurance on Dynamic Employment Transitions

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  • Donna B. Gilleskie
  • Byron F. Lutz

Abstract

We estimate the impact of employer-provided health insurance (EPHI) on the job mobility of males over time using a dynamic empirical model that accounts for unobserved heterogeneity. Previous studies of job-lock reach different conclusions about possible distortions in labor mobility stemming from an employment-based health insurance system: a few authors find no evidence of job-lock, while most find reductions in the mobility of insured workers of between 20 and 40%. WE use data from the National Longitudinal Survey of Youth which describes the health insurance an individual holds, as well as whether he is offered insurance by his employer. This additional information allows us to model the latent individual characteristics that are correlated with the offer of EPHI, the acceptance of EPHI, and employment transitions. Our results provide an estimate of job-lock unbiased through correlation with positive job characteristics and individual specific turnover propensity. We find no evidence of job-lock among married males, and produce small estimates of job-lock among unmarried males of between 10 and 15%.

Suggested Citation

  • Donna B. Gilleskie & Byron F. Lutz, 1999. "The Impact of Employer-Provided Health Insurance on Dynamic Employment Transitions," NBER Working Papers 7307, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:7307
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    References listed on IDEAS

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    1. Thomas C. Buchmueller & Robert G. Valletta, 1996. "The Effects of Employer-Provided Health Insurance on Worker Mobility," ILR Review, Cornell University, ILR School, vol. 49(3), pages 439-455, April.
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    More about this item

    JEL classification:

    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
    • I1 - Health, Education, and Welfare - - Health

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