Employment-Based Health Insurance and Job Mobility: Is There Evidence of Job-Lock?

This paper assesses the impact of employer-provided health insurance on job mobility by exploring the extent to which workers are 'locked' into their jobs because preexisting conditions exclusions make it expensive for individuals with medical problems to relinquish their current health insurance. I estimate the degree of job-lock by comparing the difference in the turnover rates of those with high and low medical expenses for those with and without employer-provided health insurance. Using data from the 1987 National Medical Expenditure Survey, I estimate that job-lock reduces the voluntary turnover rate of those with employer-provided health insurance by 25 percent, from 16 percent to 12 percent per year.

[1]  James N. Brown,et al.  Interpreting Panel Data on Job Tenure , 1992, Journal of Labor Economics.

[2]  E. Keeler,et al.  Health insurance and the demand for medical care: evidence from a randomized experiment. , 1987, The American economic review.

[3]  G. Borjas,et al.  Middle-Age Job Mobility: Its Determinants and Consequences , 1977 .

[4]  A. Bartel.  Wages, Nonwage Job Characteristics, and Labor Mobility , 1980 .

[5]  D. Holtz-eakin.  Health Insurance Provision and Labor Market Efficiency in the United States and Germany , 1994 .

[6]  O. Mitchell.  Fringe Benefits and Labor Mobility , 1982 .

[7]  Alan L. Gustman,et al.  Pension Portability and Labor Mobility: Evidence from the Survey of Income and Program Participation , 1990 .

[8]  Brigitte C. Madrian,et al.  Limited Insurance Portability and Job Mobility: The Effects of Public Policy on Job-Lock , 1993 .

[9]  Dale T. Mortensen,et al.  Chapter 15 Job search and labor market analysis , 1986 .

[10]  Alan L. Gustman,et al.  Pensions, Efficiency Wages, and Job Mobility , 1987 .

[11]  B. Schiller,et al.  The Impact of Private Pensions on Firm Attachment , 1979 .

[12]  G. Hughes,et al.  The influence of pensions on job mobility , 1984 .

[13]  O. Mitchell.  Fringe Benefits and the Cost of Changing Jobs , 1983 .

[14]  Boyan Jovanovic.  Job Matching and the Theory of Turnover , 1979, Journal of Political Economy.

[15]  P. Cotton.  Preexisting conditions 'hold Americans hostage' to employers and insurance. , 1991, JAMA.

[16]  Zvi Griliches,et al.  Specification Error in Probit Models , 1985 .