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Job lock : evidence from a regression discontinuity design

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  • Robert W. Fairlie
  • Kanika Kapur
  • Susan M. Gates

Abstract

Employer-provided health insurance in the United States is suspected of restricting job mobility, resulting in “job lock.” Previous research on job lock finds mixed results using several methodologies. We take a new approach to examine whether employer-based health insurance discourages job mobility by exploiting the discontinuity created at age 65 through the qualification for Medicare. Using a novel procedure for identifying age in months from matched monthly CPS data and a relatively unexplored administration measure of job mobility, we compare job mobility among male workers in the months just prior to turning age 65 to job mobility in the months just after turning age 65. We find no evidence that job mobility increases at the age 65 threshold when Medicare eligibility starts. Our results are robust to different bandwidths, non-linear age profiles, and frequency of age measurement. The upper bounds of 95 percent confidence intervals for these estimates can rule out the existence of any job lock in some cases, and in most cases can rule out the large levels of job lock found in many previous studies in the literature. We also do not find evidence that other factors such as retirement, reduction in hours worked, social security eligibility, pension eligibility, and sample changes confound the results on job mobility in the month individuals turn 65.

Suggested Citation

  • Robert W. Fairlie & Kanika Kapur & Susan M. Gates, 2012. "Job lock : evidence from a regression discontinuity design," Working Papers 201215, School of Economics, University College Dublin.
  • Handle: RePEc:ucn:wpaper:201215
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    File URL: http://hdl.handle.net/10197/3621
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    References listed on IDEAS

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    Cited by:

    1. Zoltan Acs & Thomas Åstebro & David Audretsch & David T. Robinson, 2016. "Public policy to promote entrepreneurship: a call to arms," Small Business Economics, Springer, vol. 47(1), pages 35-51, June.
    2. Tim Bersak, 2019. "Identification of Job Lock and Inefficient Labor Market Mobility," Southern Economic Journal, John Wiley & Sons, vol. 86(2), pages 530-547, October.
    3. Joern H. Block & Christian O. Fisch & Mirjam van Praag, 2017. "The Schumpeterian entrepreneur: a review of the empirical evidence on the antecedents, behaviour and consequences of innovative entrepreneurship," Industry and Innovation, Taylor & Francis Journals, vol. 24(1), pages 61-95, January.
    4. Jeffrey DeSimone, 2018. "Suicide And The Social Security Early Retirement Age," Contemporary Economic Policy, Western Economic Association International, vol. 36(3), pages 435-450, July.
    5. Candon, David, 2018. "The effect of cancer on the labor supply of employed men over the age of 65," Economics & Human Biology, Elsevier, vol. 31(C), pages 184-199.
    6. Witman, Allison, 2015. "Public health insurance and disparate eligibility of spouses: The Medicare eligibility gap," Journal of Health Economics, Elsevier, vol. 40(C), pages 10-25.
    7. Shi, Xuezhu, 2020. "Locked out? China’s health insurance scheme and internal migration," Labour Economics, Elsevier, vol. 67(C).

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    More about this item

    Keywords

    Job lock; Health insurance; Medicare; Occupational mobility--United States; Employer-sponsored health insurance--United States; Medicare;
    All these keywords.

    JEL classification:

    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private

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