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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. Mroz, Thomas A., 1999. "Discrete factor approximations in simultaneous equation models: Estimating the impact of a dummy endogenous variable on a continuous outcome," Journal of Econometrics, Elsevier, vol. 92(2), pages 233-274, October.
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    3. Sanders Korenman & David Neumark, 1991. "Does Marriage Really Make Men More Productive?," Journal of Human Resources, University of Wisconsin Press, vol. 26(2), pages 282-307.
    4. 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.
    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. Rebecca M. Blank, 1994. "Social Protection versus Economic Flexibility: Is There a Trade-Off?," NBER Books, National Bureau of Economic Research, Inc, number blan94-1, June.
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    Citations

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    Cited by:

    1. Robert W. Fairlie & Kanika Kapur & Susan Gates, 2016. "Job Lock: Evidence from a Regression Discontinuity Design," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 55(1), pages 92-121, January.
    2. Jonathan Gruber & Brigitte C. Madrian, 2002. "Health Insurance, Labor Supply, and Job Mobility: A Critical Review of the Literature," JCPR Working Papers 255, Northwestern University/University of Chicago Joint Center for Poverty Research.
    3. Gulcin Gumus & Tracy Regan, 2007. "Self-Employment and the Role of Health Insurance," Working Papers 0910, University of Miami, Department of Economics.
    4. Brigitte C. Madrian, 2005. "The U.S. health care system and labor markets," Conference Series ; [Proceedings], Federal Reserve Bank of Boston, vol. 50(Jun), pages 137-163.
    5. Anna Sanz De Galdeano, 2004. "Health Insurance and Job Mobility: Evidence from Clinton's Second Mandate," CSEF Working Papers 122, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    6. Lacroix, G & Brouard M-E, 2011. "Work Absenteeism Due to a Chronic Disease," Health, Econometrics and Data Group (HEDG) Working Papers 11/15, HEDG, c/o Department of Economics, University of York.
    7. Lui, Hon-Kwong & Suen, Wing, 2011. "The effects of public housing on internal mobility in Hong Kong," Journal of Housing Economics, Elsevier, vol. 20(1), pages 15-29, March.
    8. Tracy L. Regan & Gulcin Gumus, 2006. "Tax Incentives as a Solution to the Uninsured: Evidence from the Self-Employed," Working Papers 0709, University of Miami, Department of Economics, revised Oct 2007.
    9. Hamersma, Sarah & Kim, Matthew, 2009. "The effect of parental Medicaid expansions on job mobility," Journal of Health Economics, Elsevier, vol. 28(4), pages 761-770, July.
    10. Fairlie, Robert W. & Kapur, Kanika & Gates, Susan, 2011. "Is employer-based health insurance a barrier to entrepreneurship?," Journal of Health Economics, Elsevier, vol. 30(1), pages 146-162, January.
    11. Dale-Olsen, Harald, 2006. "Wages, fringe benefits and worker turnover," Labour Economics, Elsevier, vol. 13(1), pages 87-105, February.
    12. Martha Harrison Stinson, 2002. "Estimating the Relationship between Employer-Provided Health Insurance, Worker Mobility, and Wages," 10th International Conference on Panel Data, Berlin, July 5-6, 2002 B1-2, International Conferences on Panel Data.
    13. Fairlie, Robert W. & London, Rebecca A., 2008. "Race, Ethnicity and the Dynamics of Health Insurance Coverage," IZA Discussion Papers 3708, Institute for the Study of Labor (IZA).
    14. Harris, Douglas N. & Adams, Scott J., 2007. "Understanding the level and causes of teacher turnover: A comparison with other professions," Economics of Education Review, Elsevier, vol. 26(3), pages 325-337, June.
    15. McGarry, Kathleen, 2002. "Public Policy and the U.S. Health Insurance Market: Direct and Indirect Provision of Insurance," National Tax Journal, National Tax Association;National Tax Journal, vol. 55(4), pages 789-827, December.
    16. 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.

    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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