Year

2010

Series

Upjohn Institute Working Paper No. 10-167

Abstract

Despite a strong interest in entrepreneurship, economists have devoted little attention to the role of health insurance availability. I investigate the impact of a unique policy experiment—New Jersey’s Individual Health Coverage Plan—on self-employment. Implemented in August 1993, the IHCP included an extensive set of reforms that loosened the historical connection between traditional employment and health insurance by facilitating access to coverage that was not employer-linked. I find evidence that the IHCP increased self-employment among New Jersey residents, relative to various sets of comparison states. Consistent with key policy features, including pure community rating of premiums, I find larger behavioral responses for unmarried, older, and observably less-healthy individuals.

Issue Date

April 2010

Sponsorship

Financial support from the W.E. Upjohn Institute for Employment Research

Subject Areas

LABOR MARKET ISSUES; Wages and benefits; Health insurance

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