Impacts of Public Health Insurance on Occupational Upgrading

Using data from the Current Population Survey’s Merged Outgoing Rotation Groups, the authors examine whether greater Medicaid generosity encourages people to switch toward better quality occupations. Exploiting variation in Medicaid eligibility expansions for children across states during the 1990s and early 2000s, they find that a one standard deviation increase in Medicaid infant income thresholds increased the likelihood that working parents move to a new occupation by 1.6 percentage points or 3.3%. Findings show that these effects are larger for those below 150% of the poverty line and for married parents who were not benefiting from Medicaid prior to the expansions. In addition, findings indicate that Medicaid generosity also increased mobility toward occupations with higher average wages and higher educational requirements. This article contributes to the literature on job lock by showing that access to public health insurance not only increases employment and job switches but also encourages occupational upgrading.

WORK ENVIRONMENTS AMONG OLDER WORKING CAREGIVERS

Many older workers balance paid work with care work. Working caregivers face unique challenges that make them more likely to leave the work force. However work environments may be more or less accommodating to their needs, and in addition, they may need to work for financial reasons. Current research on working caregivers has not explored: a) the work environments of older working caregivers; b) whether particular work environments are likely to influence whether caregivers stop working; and c) whether these effects vary by type of care work (spousal versus parental). This study addresses these gaps. Using data drawn from the 2008-2014 waves of the Health and Retirement Study, we used latent class analysis to develop a typology of work environments of individuals 51-75 who are engaged in paid work. Four classes of work environments emerged: A) balanced, supportive work environments (34%); B) average environments with high job lock (30%); C) poor, unsupportive work environments (21%); and D) highly accommodating, stressful jobs (14%). Logistic regression results showed those in group D were less likely than all other groups to leave their jobs. In addition, relative to spousal caregivers, parental caregivers in class A were significantly more likely to leave the labor force. Results suggest that caregivers may be more likely to continue engaging in paid work in supportive work environments, and work environments may be more likely to retain older working caregivers by identifying ways to help them meet their work needs and maintain their caregiving roles.

Health Insurance and Labor Supply

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 nongroup 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.

Did the ACA reduce job-lock and spur entrepreneurship?

Purpose The purpose of this paper is to assess the effect of the recent Affordable Care Act’s (ACA) Dependent Mandate (DM) that requires health insurers to extend dependent coverage to the children of their insured, up to age 26. The DM has the potential to free young persons from “job lock,” enabling them to engage in entrepreneurial activity. Using the American Community Survey, the authors analyze the change in self-employment for ages 18-25 relative to the implementation of the DM. Design/methodology/approach The authors approach the research question in a unique manner and in doing so, extend the literature. Employing national data, the authors focus on young adults impacted by the DM (those under the age of 26 may remain on their parents’ insurance). While the DM is a condition of the ACA, prior to its implementation several states had already passed their own such provision. The authors exploit this state-by-state variation in the methodology. Findings The authors find no evidence that the ACA has stimulated self-employment among all young adults. However, the authors determine that the DM has a positive and significant effect on the likelihood of students being self-employed. The result is even more pronounced when using a stricter definition of entrepreneurship, an incorporated business. Sub-group analyses show no evidence of a significant effect on entrepreneurship among young adults in other groups. The results remain after conducting various falsification tests. Originality/value The paper empirically addresses the commonly held belief that the ACA is creating new businesses via reduced job lock. Policy makers may wish to target other explanations of job lock rather than health insurance availability.