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Health Insurance Availability and Entrepreneurship

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  • Philip DeCicca

    (McMaster University)

Abstract

Despite a strong interest in entrepreneurship, economists have devoted little attention to the role of health insurance availability. I investigate the impact of a unique policy experiment—New Jersey’s Individual Health Coverage Plan—on self-employment. Implemented in August 1993, the IHCP included an extensive set of reforms that loosened the historical connection between traditional employment and health insurance by facilitating access to coverage that was not employer-linked. I find evidence that the IHCP increased self-employment among New Jersey residents, relative to various sets of comparison states. Consistent with key policy features, including pure community rating of premiums, I find larger behavioral responses for unmarried, older, and observably less-healthy individuals.

Suggested Citation

  • Philip DeCicca, 2010. "Health Insurance Availability and Entrepreneurship," Upjohn Working Papers 10-167, W.E. Upjohn Institute for Employment Research.
    • Handle: RePEc:upj:weupjo:10-167
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    References listed on IDEAS

    as
    1. Brigitte C. Madrian, 2005. "The U.S. health care system and labor markets," Conference Series ; [Proceedings], Federal Reserve Bank of Boston, vol. 50(Jun), pages 137-163.
    2. Holtz-Eakin, Douglas & Penrod, John R. & Rosen, Harvey S., 1996. "Health insurance and the supply of entrepreneurs," Journal of Public Economics, Elsevier, vol. 62(1-2), pages 209-235, October.
    3. David A. Wise, 1996. "Advances in the Economics of Aging," NBER Books, National Bureau of Economic Research, Inc, number wise96-1, July.
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    Citations

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    Cited by:

    1. Gulcin Gumus & Tracy Regan, 2007. "Self-Employment and the Role of Health Insurance," Working Papers 0910, University of Miami, Department of Economics.
    2. Velamuri, Malathi, 2009. "Taxes, Health Insurance and Women’s Self-Employment," MPRA Paper 15731, University Library of Munich, Germany.
    3. Fairlie, Robert W. & Kapur, Kanika & Gates, Susan, 2011. "Is employer-based health insurance a barrier to entrepreneurship?," Journal of Health Economics, Elsevier, vol. 30(1), pages 146-162, January.
    4. Thomas C. Buchmueller & Alan C. Monheit, 2009. "Employer-Sponsored Health Insurance and the Promise of Health Insurance Reform," NBER Working Papers 14839, National Bureau of Economic Research, Inc.

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    More about this item

    Keywords

    Health Insurance; Entrepreneurship; Job Lock;
    All these keywords.

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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