Health Insurance and Labor Supply

Gregory Colman, Dhaval Dave, Otto Lenhart

Research output: Chapter in Book/Report/Conference proceedingEntry for encyclopedia/dictionary

Abstract

Health insurance depends on labor market activity more in the U.S. than in any other high-income country. A majority of the population are insured through an employer (known as employer-sponsored insurance or ESI), benefiting from the risk pooling and economies of scale available to group insurance plans. Some workers may therefore be reluctant to leave a job for fear of losing such low-cost insurance, a tendency known as “job lock,” or may switch jobs or work more hours merely to obtain it, known as “job push.” Others obtain insurance through government programs for which eligibility depends on income. They too may adapt their work effort to remain eligible for insurance. Those without access to ESI or who are too young or earn too much to qualify for public coverage (Medicare and Medicaid) can buy insurance only in the individual or non-group market, where prices are high and variable. Most studies using data from before the passage of the Patient Protection and Affordable Care Act (ACA) in 2010 support the prediction that ESI reduced job mobility, labor-force participation, retirement, and self-employment prior to the ACA, but find little effect on the labor supply of public insurance. The ACA profoundly changed the health insurance market in the U.S., removing restrictions on obtaining insurance from new employers or on the individual market and expanding Medicaid eligibility to previously ineligible adults. Research on the ACA, however, has not found substantial labor supply effects. These results may reflect that the reforms to the individual market mainly affected those who were previously uninsured rather than workers with ESI, that the theoretical labor market effects of expansions in public coverage are ambiguous, and that the effect would be found only among the relatively small number on the fringes of eligibility.
LanguageEnglish
Title of host publicationOxford Research Encyclopedia of Economics and Finance
Place of Publication[New York]
Number of pages26
DOIs
Publication statusPublished - 30 Apr 2019

Publication series

NameOxford Research Encyclopedias
PublisherOxford University Press

Fingerprint

Health insurance
Insurance
Labor supply
Employers
Workers
Labour market
Income
Medicaid
Medicare
Labor force participation
Risk pooling
Prediction
Work hours
Self-employment
Retirement
Market price
Government
Costs
Job mobility
Economies of scale

Keywords

  • health economics
  • health insurance
  • labor supply
  • work
  • employment
  • job lock
  • Medicaid
  • Medicare
  • employer-sponsored insurance
  • Affordable Care Act

Cite this

Colman, G., Dave, D., & Lenhart, O. (2019). Health Insurance and Labor Supply. In Oxford Research Encyclopedia of Economics and Finance (Oxford Research Encyclopedias). [New York]. https://doi.org/10.1093/acrefore/9780190625979.013.438
Colman, Gregory ; Dave, Dhaval ; Lenhart, Otto. / Health Insurance and Labor Supply. Oxford Research Encyclopedia of Economics and Finance. [New York], 2019. (Oxford Research Encyclopedias).
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Colman, G, Dave, D & Lenhart, O 2019, Health Insurance and Labor Supply. in Oxford Research Encyclopedia of Economics and Finance. Oxford Research Encyclopedias, [New York]. https://doi.org/10.1093/acrefore/9780190625979.013.438

Health Insurance and Labor Supply. / Colman, Gregory; Dave, Dhaval; Lenhart, Otto.

Oxford Research Encyclopedia of Economics and Finance. [New York], 2019. (Oxford Research Encyclopedias).

Research output: Chapter in Book/Report/Conference proceedingEntry for encyclopedia/dictionary

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Colman G, Dave D, Lenhart O. Health Insurance and Labor Supply. In Oxford Research Encyclopedia of Economics and Finance. [New York]. 2019. (Oxford Research Encyclopedias). https://doi.org/10.1093/acrefore/9780190625979.013.438