We explore the relationship between access to affordable health insurance and self-employment using exogenous variation from the introduction of Medicare Part D that reduced the out-of-pocket cost of prescription drugs and improved health outcomes in a difference-in-differences model using the American Community Survey. We find that our treatment group of individuals aged 65–69 were 0.5 percentage points (or 5%) more likely to be self-employed in relation to a control group aged 60–64.
BlanchflowerD.OswaldA. J. (1998). What makes an entrepreneur?Journal of Labor Economics, 16, 26–60.
5.
BlauD. M.GilleskieD. B. (2001). The effect of health on employment transitions of older men. In PolachekS. (Ed.), Worker wellbeing in a changing labor market. Research in labor economics (Vol. 20, pp. 35–65). Amsterdam, the Netherlands: JAI Press.
6.
BruceD.Holtz-EakinD.QuinnJ. (2000). Self-employment and labor market transitions at older ages, Boston College Department of Economics(Working Paper 490). Retrieved fromhttp://fmwww.bc.edu/EC-P/wp490.pdf
CahillK. E.GiandreaM. D.QuinnJ. F. (2008, 2). A micro-level analysis of recent increases in labor force participation among older workers (Working Paper 2008-8). Chestnut Hill, MA: Center for Retirement Research, Boston College.
9.
ClarkR. A.QuinnJ. F. (2005). Effects of pensions on labor markets and retirement. In GaleW.ShovenJ.WarshawskyM. (Eds.), The evolving pension system: Trends, effects, and proposals for reform (pp. 77–102). Washington, DC: Brookings Institution.
10.
DieboldJ. (2016). The effects of medicare part D on health outcomes of newly covered medicare beneficiaries. The Journals of Gerontology Series B: Psychological Sciences and Social Sciences. doi:10.1093/geronb/gbw030
11.
EngelhardtG. V.GruberJ. (2011). Medicare Part D and the financial protection of the elderly. American Economic Journal: Economic Policy, 3, 77–102.
12.
FairlieR. W.KapurK.GatesS. (2011). Does employer-based health insurance limit entrepreneurship?Journal of Health Economics, 30, 146–162.
HeimB. T.LurieI. Z. (2010). The effect of self-employed health insurance subsidies on self-employment. Journal of public Economics, 94, 995–1007.
16.
HeimB. T.LurieI. Z. (2014a, 43). Does health reform affect self-employment? Evidence from Massachusetts. Small Business Economics, 35–49. doi:10.1007/s11187-014-9572-6
17.
HeimB. T.LurieI. Z. (2014b). Did reform of the non-group health insurance market affect the decision to be self-employed? Evidence from state reforms in the 1990s. Health Economics, 23, 841–860. doi:10.1002/hec.2960
Holtz-EakinD.PenrodJ. R.RosenH. S. (1996). Health insurance and the supply of entrepreneurs. Journal of Public Economics, 62, 209–235.
20.
KaestnerR.KhanN. (2012). Medicare Part D and its effect on the use of prescription drugs and use of other health care services of the elderly. Journal of Policy Analysis and Management, 31, 253–279.
21.
KaestnerR.LongC.AlexanderG. C. (2014). Effects of prescription drug insurance on hospitalization and mortality: Evidence from Medicare Part D (NBER Working Paper No. 19948). Cambridge, MA: National Bureau of Economic Research.
22.
KennedyJ. J.MaciejewskiM.LiuD.BlodgettE. (2011). Cost-related nonadherence in the Medicare program: The impact of Part D. Medical Care, 49, 522–526.
23.
KetchamJ. D.SimonK. (2008, 9). Medicare Part D’s effects on elderly drug costs and utilization (NBER Working Paper No. 14326). National Bureau of Economic Research. Retrieved November 4, 2014, fromhttp://www.nber.org/papers/w14326
24.
LevyH.WeirD. R. (2009). Take-up of Medicare Part D: Results from the health and retirement study. Journals of Gerontology Series B: Psychological Sciences & Social Sciences, 65B, 492–501.
25.
LombardK. V. (2001). Female self-employment and demand for flexible, nonstandard work schedules. Economic Inquiry, 29, 214–317.
26.
MahmoudiE.JensenG. A. (2014). Has Medicare Part D reduced racial/ethnic disparities in prescription drug use and spending?Health Services Research, 49, 502–525.
27.
MoultonJ. G.ScottJ. C. (2016). Opportunity or necessity: Disaggregating self-employment and entry at the older ages. Social Forces, 94, 1539–1566.
28.
MutchlerJ. E.BurrJ. A.MassagliM. P.PientaA. (1999). Work transitions and health in later life. The Journals of Gerontology Series B: Psychological Sciences and Social Sciences, 54, S252–S261.
NeumanT.StrolloM. K.GutermanS.RogersW. H.LiA.RoddayA. M.SafranD. G. (2007). Medicare prescription drug benefit progress report: Findings from a 2006 national survey of seniors. Health Affairs (Project Hope), 26, w630–x643.
31.
ParkerS. C. (2006). Entrepreneurship, self-employment and the labour market. In CassonM.YeungB.BasuA.WadesonN. (Eds.), The Oxford handbook of entrepreneurship (pp. 435–460). Oxford, England: Oxford University Press.
32.
QuinnJ. F. (1980). Labor force participation patterns of older self-employed workers. Social Security Bulletin, 43, 17–28.
33.
RugglesS.GenadekK.GoekenR.GroverJ.SobekM. (2015). Integrated public use microdata series: Version 6.0[Machine-readable database]. Minneapolis: University of Minnesota.
34.
SafranD. G.NeumanT.SchoenC.KitchmanM. K.WilsonI. B.CooperB.…RogersW. H. (2005). Prescription drug coverage and seniors: Findings from a 2003 national survey. Health Affairs. doi:10.1377/hlthaff.w5.152.
35.
SafranD. G.StrolloM. K.GutemanS.LiA.RogersW. H.NeumanP. (2010). Prescription coverage, use and spending before and after Part D implementation: A national longitudinal panel study. JGIM: Journal of General Internal Medicine, 25, 10–17.
36.
SambamoorthiU.SheaD.CrystalS. (2003). Total and out-of-pocket expenditures for prescription drugs among older persons. The Gerontologist, 43, 345–359.
37.
SammartinoF. J. (1987). Effect of health on retirement. Social Security Bulletin, 50, 31.
38.
ScottJ. C.ChenY.-P. (2003). Gradual retirement: An additional option in work and retirement. North American Actuarial Journal, 7, 62–74.
39.
SinghG.DeNobleA. (2003). Early retirees as the next generation of entrepreneurs. Entrepreneurship Theory & Practice, 27, 207–226.
40.
SinghG.VermaA. (2003). Work history and later-life labor force participation: Evidence from a large telecommunications firm. Industrial and Labor Relations Review, 56, 699–715.
41.
VelamuriM. (2012). Taxes, health insurance, and women’s self-employment. Contemporary Economic Policy, 30, 162–177. doi:10.1111/j.1465-7287.2011.00256.x
42.
WalkerE. A.WebsterB. J. (2007). Gender, age and self-employment: Some things change, some stay the same. Women in Management Review, 22, 122–135.
43.
WellingtonA. J. (2001). Health insurance coverage and entrepreneurship. Contemporary Economic Policy, 19, 465–478.
44.
YinW.BasuA.ZhangJ. X.RabbaniA.MelitzerD. O.AlexanderG. C. (2008). The effect of the Medicare Part D prescription benefit on drug utilization and expenditures. Annals of Internal Medicine, 148, 169–177.
45.
ZissimopoulosJ.KarolyL. A. (2007). Transitions to self-employment at older ages: The role of wealth, health, health insurance, and other factors. Labour Economics, 14, 269–295.
46.
ZissimopoulosJ.KarolyL. A. (2009). Labor force dynamics at older ages: Movements into self-employers by workers and nonworkers. Research on Aging, 31, 89–111.
