Employment Based Health Insurance and Job Mobility: Job Lock
Persistent URL
Author(s)
Davis, Sarah D.
Date Issued
April 1, 2009
Abstract
The health care system and health insurance are currently major issues in the United States, because health insurance is tied to employment. Because health insurance is tied to employment, a phenomenon has recently surfaced in the labor market and it has been termed job lock. Job lock is defined as the reduction in worker mobility that arises from the risk of losing current employer provided health insurance. Job lock causes many workers to stay at jobs where their skills are not fully utilized. Thus job lock may cause the efficiency of the labor market to suffer. The purpose of this study is to determine whether Americans, more specifically married and single women, make themselves less mobile due to employer provided health insurance.
The theory of consumer tastes and preferences suggests that mobility decisions are negatively affected when health care benefits are offered at the current job and when there is uncertainty about the price of health insurance at a new job opportunity. Thus, it is hypothesized that married women, as well as single women are victims of health insurance related job lock. In order to test this hypothesis, data was collected from the 2001 Survey of Income and Program Participation (SIPP). The data was then applied to a proper probit model. Probit regressions suggest that women with employer provided health insurance are 67.76% less likely to leave their jobs than women without employer provided health insurance. The probit regressions also suggest that single women with employer provided health insurance experience 73.37% job lock, and married women with employer provided health insurance experience 59.39% job lock. These results conform to the hypothesis that all women, both married and single, suffer from health insurance related job lock.
First Reader(s)
Martin, Stephanie M.
Other Reader(s)
Baskan, Asuman N.
Department
Economics
Type of Publication
Senior Project Paper