Graduation Year

2016

Date of Submission

12-2015

Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts

Department

Economics

Reader 1

Oana Tocoian

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Terms of Use for work posted in Scholarship@Claremont.

Rights Information

© 2015 Kethan Reddy

Abstract

The phenomenon of job-lock in the United States may be caused by a major non-portable fringe benefit provided by employers: health insurance. Would-be entrepreneurs and other self-employed individuals may not be achieving their full potential due to being “locked” in their wage-employment. With data from the Survey of Consumer Finances in years 2004, 2007, and 2009, this study explores this effect, whether it exists, and whether it is lessened by worse health status. Amongst married households, there is evidence that husbands are 9.2% more likely to be entrepreneurs if their spouses have employer coverage, whereas wives are not. Somewhat surprisingly, this effect is not associated with health care demand. Amongst non-married individuals, employer coverage restricts transitions into self-employment by 3.6%. Both of these results provide evidence for job lock, and have loose implications on how universal healthcare may free individuals to pursue entrepreneurship.

This thesis is restricted to the Claremont Colleges current faculty, students, and staff.

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