Health Insurance Availability and Entrepreneurship: Evidence from New Jersey
Early Career Research Award
Despite a strong interest in entrepreneurship, economists have devoted little attention to the role of health insurance availability. The researcher 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. Evidence shows 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, the research finds larger behavioral responses for unmarried, older, and observably less-healthy individuals.