Limited Insurance Portability and Job Mobility: The Effects of Public Policy on Job-Lock

Jonathan Gruber, Brigitte C. Madrian

NBER Working Paper No. 4479
Issued in September 1993
NBER Program(s):Public Economics, Labor Studies, Health Care

The link between health insurance and the workplace in the U.S. has led to concern over the possibility of insurance-induced reductions in job mobility or 'job-lock". Designing health insurance reforms which retain employer-based insurance coverage but mitigate the extent of job-lock requires an understanding of the policy dimensions to which job-lock is most receptive. We study a policy of limited insurance portability which has been adopted by a number of states and the federal government over the last 20 years. These "continuation of coverage' mandates grant individuals the right to continue purchasing health insurance through their former employers for some period of time after leaving their jobs. We find that the passage of these mandates caused a significant increase in the job mobility of prime age male workers. This suggests that a sizeable share of job-lock arises from short run concerns over portability rather than from long run problems.

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Document Object Identifier (DOI): 10.3386/w4479

Published: Industrial and Labor Relations Review, (October 1994), 48: p. 86-102new title: "Health Insurance and Job Mobility: The Effects of Public Policy on Job-Lock"

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