Title

Will Universal Health Insurance Enhance Entrepreneurial Activity?

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Abstract

While over 70% of U.S. wage earners and their families are covered by employer-provided health insurance, self-employed individuals have limited access to it and face higher participation costs. As a result, social commentators and policy makers have long argued that many people are “locked” into their current jobs because of fear of losing their health coverage even though they could be more productive in self-employment. Using data from the Medical Expenditure Panel Survey for the period 2000-2008, we investigate whether employer-provided health insurance influences employment choices in the long term. Our results suggest that, under certain conditions, the ability to retain health insurance is, in fact, important for employment choices even after the passage of COBRA and HIPAA. In particular, we find the relationship between demand for health-insurance and employment choice to be significantly mediated by risk tolerance and individual and family health status.

Academic Division

Economics

Disciplines

Econometrics | Entrepreneurial and Small Business Operations | Health Economics

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