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Job-Lock: An Impediment to Labor Mobility? Is Health Insurance Crippling the Labor Market?

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  • Douglas Holtz-Eakin

Abstract

Recent survey results and anecdotal evidence appear to indicate that workers sometimes sacrifice job opportunities by remaining in their current position in order to retain health benefits. If "job-lock" is real, the nation pays an economic price in terms of a misallocation of workersamong productive opportunities, higher relocation and training costs for workers who have stayed too long in their jobs, and the loss of innovation, employment, and competition associated with start-up ventures. Holtz-Eakin suggests that the incidence of job-lock may be overstated. Therefore, reform programs proposing to dismantle the current system of employer-provided insurance in order to improve labor mobility are misguided. Rather, policy should aim to improve access to health care, improve the efficiency of insurance operations, and guarantee the portability of insurance coverage and premium expenses.

Suggested Citation

  • Douglas Holtz-Eakin, "undated". "Job-Lock: An Impediment to Labor Mobility? Is Health Insurance Crippling the Labor Market?," Economics Public Policy Brief Archive 10, Levy Economics Institute.
    • Handle: RePEc:lev:levppb:10
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    References listed on IDEAS

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    1. Jonathan Gruber & Brigitte C. Madrian, 1993. "Limited Insurance Portability and Job Mobility: The Effects of Public Policy on Job-Lock," NBER Working Papers 4479, National Bureau of Economic Research, Inc.
    2. Woodbury, Stephen A & Hamermesh, Daniel S, 1992. "Taxes, Fringe Benefits and Faculty," The Review of Economics and Statistics, MIT Press, vol. 74(2), pages 287-296, May.
    3. Frank A. Sloan & Killard W. Adamache, 1986. "Taxation and the Growth of Nonwage Compensation," Public Finance Review, , vol. 14(2), pages 115-137, April.
    4. Brigitte C. Madrian, 1994. "Employment-Based Health Insurance and Job Mobility: Is there Evidence of Job-Lock?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(1), pages 27-54.
    5. Douglas Holtz-Eakin, 1993. "Health Insurance Provision and Labor Market Efficiency in the United States," NBER Working Papers 4388, National Bureau of Economic Research, Inc.
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