The goal of this study as the paper stated is to determine whether the coverage mandate requiring employer to continue providing health insurance coverage to workers who leave the firm for a specified period of time is also effective in alleviating job-lock as these mandates have great effect on the retirement behavior of older workers. According to Gruber and Madrian, many workers declined employment opportunities that offer higher total productivity and wages but their health insurance is inferior to that in the current job. Gruber and Madrian stressed that this is unfair and may result to potential market failure due to lack of Market for worker/job-specific compensation package. Thus, the goal of the study is to find out how this unfair practice of job-lock would be resolved.
The period covered for this study based on the data used. The data were from 1984, 1985, 1986, and 1987 which suggest that the period covered by the study was from 1984 to 1987 up to the early part of 1989. According to Gruber and Madrian, during this period the economy was growing however, continuation of insurance coverage were available only to those with employer-provided health insurance. The period covered by this study therefore were the years were in economic opportunities provides workers and employees a better option regarding employment opportunity.
The data or source s for this study as mentioned earlier was from the 1984, 1985, 1986 and 1987 panels of the Survey of Income and Program Participation (SIPP). The data of these sources according to Gruber and Madrian were a result of a national survey collecting information on the economic and demographic characteristics of individuals and their families through a series of quarterly interviews that lasted for roughly two and one-half years referred to as “waves.” According to Gruber and Madrian, included in the data sources are the final sample consisting of 155,151 quarterly observations on 29, 841 individuals.
Based on their findings, well-educated and older workers are less likely to change their jobs and employees and workers receiving high wages or health insurance are much less likely to leave their jobs. Their findings further reveal that there are other reasons why workers are reluctant to leave their job despite of a better option available to them. However, the study concludes that job-lock is reduced when there is an assurance of continuation of insurance coverage for one year if a worker leaves job for another.
The information I learned from this study is that people valued their jobs more based on what they gain in terms of health needs. Insurance coverage pertains to health issues and workers would rather chose lower wages with a good insurance benefit than higher wages with less insurance benefit. That is, workers are more conscious of their physical welfare than earning more money.
While the authors did a great deal of efforts for this study, I would that their efforts are greater than their findings. This is because workers are not tied up to their jobs. They can leave or resign any time if they feel that their job does not provide them well. It means that they knew what is better for them regardless of the opportunities around them. Apparently, people are more secured and well provided in their jobs. The issue therefore was not about job-lock nor the insurance coverage, but where they feel secure and at the same time provided.