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Family Health Benefits and Worker Turnover

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  • Dan A. Black

    (University of Kentucky)

Abstract

In this paper, I examine the impact of employer-provided health benefits on job turnover. Because many employer-provided plans extend coverage to a worker's entire family, the value of an employer's employment offer to a worker depends on whether the worker's spouse provides the family with health benefits. If a worker's spouse has an employer-provided health insurance for their family, the worker will value employment offers with and without health insurance benefits differently than a worker whose spouse does not have employer-provided health benefits. Importantly, this distortion arises from the reliance on employer-provided benefits and is independent of any pre-existing conditions clauses or issues concerning the portability of health plans. The estimates suggest that spouse-provided benefits substantially increase the likelihood of turnover.

Suggested Citation

  • Dan A. Black, 1996. "Family Health Benefits and Worker Turnover," Labor and Demography 9604001, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpla:9604001
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    References listed on IDEAS

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    1. Frank A. Scott & Mark C. Berger & Dan A. Black, 1989. "Effects of the Tax Treatment of Fringe Benefits on Labor Market Segmentation," ILR Review, Cornell University, ILR School, vol. 42(2), pages 216-229, January.
    2. Woodbury, Stephen A, 1983. "Substitution between Wage and Nonwage Benefits," American Economic Review, American Economic Association, vol. 73(1), pages 166-182, March.
    3. 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.
    4. Ippolito, Richard A, 1985. "The Labor Contract and True Economic Pension Liabilities," American Economic Review, American Economic Association, vol. 75(5), pages 1031-1043, December.
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    6. Diamond, Peter, 1992. "Organizing the Health Insurance Market," Econometrica, Econometric Society, vol. 60(6), pages 1233-1254, November.
    7. Long, James E & Scott, Frank A, 1982. "The Income Tax and Nonwage Compensation," The Review of Economics and Statistics, MIT Press, vol. 64(2), pages 211-219, May.
    8. Steven G. Allen & Robert L. Clark & Ann A. McDermed, 1993. "Pensions, Bonding, and Lifetime Jobs," Journal of Human Resources, University of Wisconsin Press, vol. 28(3), pages 463-481.
    9. Jonathan Gruber & Alan B. Krueger, 1991. "The Incidence of Mandated Employer-Provided Insurance: Lessons from Workers' Compensation Insurance," NBER Chapters, in: Tax Policy and the Economy, Volume 5, pages 111-144, National Bureau of Economic Research, Inc.
    10. Douglas Holtz-Eakin, 1994. "Health Insurance Provision and Labor Market Efficiency in the United States and Germany," NBER Chapters, in: Social Protection versus Economic Flexibility: Is There a Trade-Off?, pages 157-188, National Bureau of Economic Research, Inc.
    11. Farber, Henry S, 1994. "The Analysis of Interfirm Worker Mobility," Journal of Labor Economics, University of Chicago Press, vol. 12(4), pages 554-593, October.
    12. 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.
    13. Rebecca A. Luzadis & Olivia S. Mitchell, 1991. "Explaining Pension Dynamics," Journal of Human Resources, University of Wisconsin Press, vol. 26(4), pages 679-703.
    14. Stephen A. Woodbury & Wei-Jang Huang, 1991. "The Tax Treatment of Fringe Benefits," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number ttfb.
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    Cited by:

    1. Anja Decressin & Julia Lane & Kristin McCue & Martha Stinson, 2005. "Employer-Provided Benefit Plans, Workforce Composition and Firm Outcomes," Longitudinal Employer-Household Dynamics Technical Papers 2005-01, Center for Economic Studies, U.S. Census Bureau.

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    More about this item

    Keywords

    turnover; health insurance; fringe benefits;
    All these keywords.

    JEL classification:

    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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