Health insurance and the labor supply decision of older workers: evidence from the U.S. Department of Veterans Affairs

Health insurance and the labor supply decision of older workers: evidence from the U.S. Department of Veterans Affairs

Collection:
Health Policy and Services Research
Series Title(s):
Center for Retirement Research working paper
Contributor(s):
Boyle, Melissa A.
Lahey, Joanna.
Boston College. Center for Retirement Research.
Publication:
Chestnut Hill, MA : Center for Retirement Research at Boston College, c2007
Language(s):
English
Format:
Text
Subject(s):
Decision Making
Employment -- statistics & numerical data
Insurance, Health -- statistics & numerical data
Retirement -- statistics & numerical data
Veterans -- psychology
Canada
United States
United States. Department of Veterans Affairs
Genre(s):
Technical Report
Abstract:
This paper exploits a major mid-1990s expansion in the U.S. Department of Veterans Affairs health care system to provide evidence on two important and interrelated U.S. policy issues: retirement policy and universal health care. Using data from the Current Population Survey, we compare the labor market behavior of older veterans and non-veterans before and after the VA health benefits expansion to test the impact of public health insurance on labor supply. We find that older workers are significantly more likely to stop working or to move from full- to part-time work after receiving access to non-employer based insurance. Older workers are also more likely to leave self-employment, a result inconsistent with "job-lock" effects of employer-based insurance, but consistent with a positive income effect from new access to public insurance. Some relatively disadvantaged subpopulations, however, may increase their labor supply after gaining greater access to public insurance, consistent with complementary positive health effects of health care access for these groups. We conclude that recent reforms expanding public health insurance have affected employment and retirement decisions, meaning that future moves toward universal coverage or expansions of Medicare are likely to have significant labor market effects. To illustrate, we calculate that as much as 10% of the difference in retirement rates in the United States and Canada may be due to Canada's provision of universal health care.
Copyright:
Reproduced with permission of the copyright holder. Further use of the material is subject to CC BY license. (More information)
Extent:
23 p.
NLM Unique ID:
101468710 (See catalog record)
Permanent Link:
http://resource.nlm.nih.gov/101468710