A National Health System Would Foster Job Mobility

One shortcoming of the current health-care system is that dependence on employer-provided insurance impedes job mobility (and economic efficiency) by causing people to stay in jobs that offer insurance. In a recent National Bureau of Economic Research (NBER) study, Brigitte C. Madrian compares 1987 turnover rates for employees with high and low medical expenses to gauge the extent of the problem. She concludes that such considerations reduce the voluntary turnover rate of workers in jobs with insurance by 25%.

Such findings suggest that baby boomers with families are likely to benefit from a universal system. Not only would they be free to make more productive job decisions but would also be likely to have more job opportunities. In another NBER study, Madrian and Jonathan Gruber find that many middle-aged workers hang on to jobs and defer early retirement when such a move entails the loss of benefits.