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

39 Pages Posted: 9 Jun 2004 Last revised: 28 Dec 2011

See all articles by Jonathan Gruber

Jonathan Gruber

Massachusetts Institute of Technology (MIT) - Department of Economics; National Bureau of Economic Research (NBER)

Brigitte C. Madrian

Brigham Young University Marriott School of Business; National Bureau of Economic Research (NBER)

Date Written: September 1993

Abstract

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.

Suggested Citation

Gruber, Jonathan and Madrian, Brigitte C., Limited Insurance Portability and Job Mobility: The Effects of Public Policy on Job-Lock (September 1993). NBER Working Paper No. w4479. Available at SSRN: https://ssrn.com/abstract=300164

Jonathan Gruber (Contact Author)

Massachusetts Institute of Technology (MIT) - Department of Economics ( email )

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HOME PAGE: http://web.mit.edu/gruberj/www/

National Bureau of Economic Research (NBER)

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Brigitte C. Madrian

Brigham Young University Marriott School of Business ( email )

Provo, UT 84602
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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