Does employment-related health insurance inhibit job mobility?

Abstract

Most private health insurance in the United States is an employment-related, nonportable fringe benefit. As a result, severing an employment relationship can lead to a loss of such coverage. The risk of losing coverage has been identified as a primary reason for not changing jobs and has shaped the debate over health care reform. This paper examines the relationship between employment-related health insurance and job mobility. We model the likelihood that a worker voluntarily changes employment, based upon insurance status and wages at an initial job, expected insurance status and wages at alternative employment, other fringe benefits, and worker and dependent health status. Analyses of data from the 1987 National Medical Expenditure Survey support the "job lock" hypothesis.