Working Paper: NBER ID: w4880
Authors: Douglas Holtz-Eakin; John R. Penrod; Harvey S. Rosen
Abstract: Some commentators have suggested that the absence of portable health insurance impedes people from leaving their jobs to start new firms. We investigate this belief by comparing wage-earners who become self-employed during a given period of time with their counterparts who do not. By examining the impact of variables relating to the health insurance and health status of these workers and their families, we can infer whether the lack of health insurance portability affects the probability that they become self-employed. The evidence does not support the conjecture that the current health insurance system affects the propensity to become self-employed. Hence, whatever its other merits, there is no reason to believe that the introduction of universal health insurance would significantly enhance entrepreneurial activity.
Keywords: health insurance; entrepreneurship; self-employment
JEL Codes: I13; L26
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| lack of health insurance portability (I13) | likelihood of becoming self-employed (L26) |
| health insurance portability (G52) | entrepreneurial transitions (L26) |
| employer-provided health insurance (I13) | unobserved job characteristics (J29) |