It is widely hypothesized that health insurance deters job mobility because of imperfections in the labor and health insurance markets. This paper describes the nature of the welfare loss attributable to such “job-lock” and reviews several studies that empirically test the job-lock hypothesis. The authors find that estimates of the magnitude and importance of job-lock vary. Studies that support the job-lock hypothesis typically report a 20% to 40% reduction in mobility rates, depending on worker marital status and gender. Their own estimates suggest that although job-lock is present in the labor market, the proportion of workers affected and the magnitude of the welfare loss are less than generally supposed.
Get full access to this article
View all access options for this article.
References
1.
BeckerGary S.1975. Human Capital, 2nd ed.New York: National Bureau of Economic Research.
2.
CoganJohn. 1980. “Labor Supply with Costs of Labor Market Entry.” In SmithJ. P., ed., Female Labor Supply. Princeton, N.J.: Princeton University Press, pp. 327–64.
3.
CooperPhilip F.MonheitAlan C., 1993. “Does Employment-Related Health Insurance Inhibit Job Mobility?”Inquiry, Vol. 30, No. 4 (Winter), pp. 400–416.
4.
EckholmErik. 1991. “Health Benefits Found to Deter Job Switching.”New York Times (September 26), pp. Al, B12.
5.
EdwardsW. ShermanBerlinMartha. 1989. Questionnaires and Data Collection Methods for the Household Survey and the Survey of American Indians and Alaska Natives (DHHS Publication No. [PHS] 89–3450). National Center for Health Sevices Research and Health Care Technology Assessment. Rockville, Md.: Public Health Service.
6.
GreenbergWarren. 1992. “Elimination of Employer-Based Health Insurance.” In HelmsR. B., ed., American Health Policy: Critical Issues for Reform. Washington, D.C.: American Enterprise Institute Press, pp. 1–14.
7.
HallMark A.1992. “The Political Economics of Health Insurance Market Reform.”Health Affairs, Vol. 11, No. 2 (Summer), pp. 108–24.
8.
HeckmanJames J.1980. “Sample Selection as a Specification Error.” In SmithJ. P., ed., Female Labor Supply. Princeton, N.J.: Princeton University Press.
9.
Holtz-EakinDouglas. 1994. “Health Insurance Provision and Labor Market Efficiency in the United States and Germany.” In BlankRebeccaFreemanRichard, eds., Social Protection Versus Economic Flexibility: Is There a Tradeoff?Chicago: University of Chicago Press, forthcoming.
10.
KosterlitzJulie. 1990. “Sick About Health.”National Journal (February 3), pp. 270–73.
11.
LazearEdward P.1981. “Agency, Earnings Profiles, Productivity, and Hours Restrictions.”American Economic Review, Vol. 71, No. 4 (September), pp. 606–20.
12.
MadrianBrigitte C.1994. “Employment-Based Health Insurance and Job Mobility: Is There Evidence of Job-Lock?”Quarterly Review of Economics, Vol. 109, No. 1 (Februrary), pp. 27–54.
13.
MitchellOlivia S.1982. “Fringe Benefits and Labor Mobility.”Journal of Human Resources, Vol. 17, No. 2 (Spring), pp. 286–98.
14.
MitchellOlivia S., 1983. “Fringe Benefits and the Cost of Changing Jobs.”Industrial and Labor Relations Review, Vol. 37, No. 1 (October), pp. 70–78.
15.
NewportF.LeonardJ., 1991. “The Crisis in National Health Care.”Gallup Poll News Service, Vol. 56, No. 14 (August 4).
16.
PaulyMark V.DanzonPatriciaFeldsteinPaulHoffJohn. 1991. “Responsible National Health Insurance.”Health Affairs, Vol. 10, No. 1 (Spring), pp. 6–25.
17.
SchorrAlvin L.1990. “Job Turnover—A Problem with Employment-Based Health Care.”New England Journal of Medicine, Vol. 323, No. 8 (August 23), pp. 543–45.
18.
U.S. Congress, Office of Technology Assessment. 1988. Medical Testing and Health Insurance, OTA-H-384. Washington, D.C.: GPO, August.
19.
U.S. Congressional Research Service. 1988. Insuring the Uninsured: Options and Analysis. Washington, D.C.: Congressional Research Service, Library of Congress, October.
20.
ZellersWendy K.McLaughlinCatherine G.FrickKevin D., 1992. “Small-Business Health Insurance: Only the Healthy Need Apply.”Health Affairs, Vol. 11, No. 1 (Spring), pp. 174–80.
