Job lock

The term job lock is used to describe the Inability of an employee to freely leave a job Because doing so will result in the loss of employee benefits (usually health or retirement related). In a broader sense, job lock can describe the situation where an employee is being paid or has accumulated significant benefits, so that it is not a realistic option.

Overview

Because the greatest source of insurance for MOST Americans is Employer Provided Health Insurance (EPHI) and an employee can not take Their EPHI with Them When They leave Their job, benefits-related job lock is a concern in the United States. [1]

The nonportability of EPHI is what causes workers to get locked into their present jobs, hence the term job lock. Bridget Madrian argued in 1994 that the link between EPHI and labor market mobility was an important factor in the cost of several proposals for the US health care system . [2] The study by Madrian (1994) estimated that job-lock reduced the voluntary turnover rate of those with EPHI by 25 percent.

Legislative efforts in the United States are the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) and the Health Insurance Portability and Accountability Act of 1996 (HIPAA). citation needed ] However, employers may require their training to pay a premium. the coverage offered will be affordable. Thus, neither COBRA nor HIPAA assures affordability of health insurance-the main cause of job lock. [3] [4] [5] [6] [7]

Causes

The potential for the expansion of the job market is much more important than it is for the job market. [1]

If they knew that they would have had identical coverage regardless of whether they worked, where they worked, or how long they had been on the job, health insurance would not be a deterrent to worker mobility. [2]

While health insurance may be purchased on an individual basis in which medical underwriting , individuals with health conditions may be eliminated as well as higher premiums or benefit exclusions.

An example of a job lock for a defined pension plan would have been worked for a company for 20 years, thus increasing a higher retirement income benefit. If they leave to work for another company their benefits are reset and they eventually realize a lower level of retirement benefits.

Prevalence

A 1987 National Medical Expenditure Survey (NMES) showed that men aged 20-55 were found to be 30-31% lower than those with employment-provided health insurance coverage, compared with those without it. An NMES 20-40% reduction in mobility rates due to employment-related health insurance. A 1984 Panel Study of Income Dynamics examining mobility rates among full-time workers aged 25-55 found no statistically significant results. A Survey of Income and Participation Program(SIPP) (1985, 1986, 1987) found that state and federal policy for the employment of older workers. A 1984 SIPP found that for men and women, there was “strong evidence” of job lock among women, but “weak evidence” of job lock among men. [8]

When attempting to estimate how often it works, it can not be more important than the risk of losing health care. Other factors can include new jobs, fringe benefits, experience, and job security. [1]

Impact

Job lock has three negative implications for society. One implication is that those who want to switch jobs are a better utility associated with it (eg better suits their skills and talents). However, if they are “stuck” at a job, the negative is that they are inefficient workers and not productive for the company and society. They are more efficient producers, and they are more efficient producers, and they are more productive and productive. [1]

The second implication is that they are more likely to face the risk of losing their lives. Employers offer health insurance benefits to ensure that their workers are healthy and, therefore, productive workers. However, since job security is common in high risk employees, the company is primarily responsible for maintaining the position of the company.

The third implication has been coined by economists as “entrepreneurship-lock”. They are less likely to leave their position because of employee benefits. However, in this case they are not leaving for a separate job, but rather self-employment. Employer provided health insurance has been shown to be less important than self-employed. This has a negative impact on both society and on the employee. In terms of society, a negative self-employment and entrepreneurship can have a negative impact on innovation. Furthermore, entrepreneurship has been shown to increase life-satisfaction when compared to salary positions.

See also

  • Switching barriers
  • Golden handcuffs – extra pay, to encourage an employee to stay with the company

References

  1. ^ Jump up to:d Santerre, Rexford E .; Neun, Stephen P. (2007). Health Economics: Theories, Insights, and Industry Studies (Fourth ed.). Mason: Cengage South-Western. pp. 324-325. ISBN  978-0-324-32071-8 .
  2. ^ Jump up to:b Madrian, Brigitte C. (1994). “Employment-Based Health Insurance and Job Mobility: Is There Evidence of Job-Lock?”. Quarterly Journal of Economics . 109 (1): 27-54. doi : 10.2307 / 2118427 . JSTOR  2118427 .
  3. Jump up^ “Job Lock” Not Diminished by New HIPAA Law, EBRI Reports | EBRI
  4. Jump up^ Quitting for Obamacare: Trapped workers may seek relief in new health exchanges – NBC News.com
  5. Jump up^ COBRA insurance too expensive for most people :: WRAL.com
  6. Jump up^ http://healthyliving.blog.ocregister.com/2009/01/19/cobra-insurance-is-too-expensive-for-unemployed-report-says/2410/
  7. Jump up^ Study: COBRA Insurance Too Expensive for Unemployed – The Commonwealth Fund
  8. Jump up^ Mills, edited by Michael H. Merson, Robert E. Black, Anne J. (2006). International public health: diseases, programs, systems, and policies (2nd ed.). Sudbury, Mass .: Jones and Bartlett. p. 632. ISBN  9780763729677 .

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