Health Insurance, Job Lock, and the Supply of Self‐Employment

23 Pages Posted: 16 Mar 2015

See all articles by Yunwei Gai

Yunwei Gai

Babson College

Maria Minniti

Syracuse University - Whitman School of Management

Date Written: April 2015

Abstract

Unlike most wage earners, self‐employed Americans have limited access to health insurance and face higher costs. Thus, social commentators and policymakers argue that many potential entrepreneurs are “locked” into their current jobs for fear of losing their health coverage even though they could be more productive in self‐employment. Using a large data set for the period 2000–2008, we find the availability of employer‐provided health insurance to be negatively correlated to the likelihood of self‐employment in the long run, but the effect to be mediated by individual and family health status. However, we find employer‐provided health insurance to have no significant effect on the probability of switching in the short run. Finally, we find differences in the magnitude of the effects between our samples of husbands and wives.

Suggested Citation

Gai, Yunwei and Minniti, Maria, Health Insurance, Job Lock, and the Supply of Self‐Employment (April 2015). Journal of Small Business Management, Vol. 53, Issue 2, pp. 558-580, 2015. Available at SSRN: https://ssrn.com/abstract=2578139 or http://dx.doi.org/10.1111/jsbm.12169

Yunwei Gai (Contact Author)

Babson College ( email )

231 Forest St.
Babson Park, MA 02457-0310
United States

Maria Minniti

Syracuse University - Whitman School of Management ( email )

721 University Avenue
Syracuse, NY 13244-2130
United States

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