This study examined one of the critical factors that could affect employment of older workers and workplace adoption of flexible work options — the costs of health insurance. Demographic groups that have higher health insurance costs, such as older workers, are less likely to be employed. In states where older workers' health insurance costs less, employment rates among those workers are correspondingly higher than in states where older workers’ health insurance costs more. Employers treat all demographic groups with higher health care costs similarly, indicating that many of the negative effects on older workers may be accounted for by financial concerns.

key research questions

• What happens to health insurance costs as workers age?
• What factors reduce the relative health care costs of older workers?
• How do employees and employers respond to high insurance costs?

selected findings

• In states with more mandates, the difference in healthcare costs between younger and older workers is smaller because the most expensive mandates (infertility, mental health, alcohol and substance abuse) are primarily utilized by younger workers.
• In general, it does not appear that worker wages adjust (that is, drop) in response to higher health care costs.
• Employment outcomes appear to decrease for workers with higher health care costs, and these results are stronger for men than for women.

publications

• Does Health Insurance Affect the Employment of Older Workers? (June 2007)

contact

For questions of information regarding the Health Insurance Costs and the Employment of Older Workers Study, please contact:

Chad Minnich, Assistant Director, Marketing/Communications
minnicch@bc.edu  |   +1 . 617 . 552 . 3122

the health insurance costs and the employment of older workers team

To schedule a conversation with any of our staff, please contact Chad Minnich, Assistant Director, Marketing & Communications, at 617-552-3122, or minnicch@bc.edu.

Joanna N. Lahey, PhD

Assistant Professor The Bush School, Texas A&M University Joanna N. Lahey is currently a Postdoctoral Research Fellow at the National Bureau of Economics Research. She is a member of the faculty at the Bush School of Government and Public Service at Texas A & M University. Dr. Lahey received her PhD in economics at the Massachusetts Institute of Technology, and her bachelor’s degree with honors in mathematics and economics from Pomona College in Claremont, California. She has an expertise in age discrimination and how age relates to labor market outcomes.