Woven through the debates about how Obamacare will affect the wallets of families and business owners is another thread of discussion around health care reform and entrepreneurship: Will the new law free up more folks to become business owners by severing the link between traditional employment and affordable health care?
A much-cited 2008 study out of Harvard Business School suggested that might be the case, concluding that 11 million Americans were suffering job lock--the inability to leave a job they're dissatisfied with--because they can't otherwise afford health insurance. Another paper by James Bailey, a Temple University graduate student in economics, looked at the effect of Obamacare on 18- to-25-year-olds who are now allowed to stay on their parents' health insurance under the law. "Those who got coverage, he found, were two to three times more likely to go into business for themselves," reports the New York Times.
Just How Prevalent Is Job Lock?
Now there's new evidence on just how pervasive the phenomenon of job lock may be. A recent survey from Securian Financial Group asked 767 employed Americans about how health insurance weighs on their employment decisions. The frequency with which they reported worrying about job lock was pretty startling. A full 40 percent said they would quit their jobs if they could buy the health insurance they currently get through their employers for the same price elsewhere, while 56 percent claimed to have considered leaving their jobs but didn't because they didn't want to give up their health insurance.
Not all of those folks who are dreaming of leaving would start their own businesses if liberated from their jobs, of course (nor would everyone who expressed interest in leaving actually do so if given the opportunity), but a pretty hefty percentage seem to be nurturing entrepreneurial dreams. Of those who said they're considering ditching their jobs, 43 percent responded that, if they did quit, they'd start their own businesses. Smaller percentages are thinking of switching to a different field where health insurance is less often offered, going back to school, simply reducing their hours, or retiring,
And this urge to explore new paths isn't just troubling those who hate their current jobs. The vast majority of those surveyed (91 percent) say that they like what they currently do.
More Female Founders
There's one more interesting wrinkle in the story of the possible consequences of freeing employees from job lock. Not only may it allow significant numbers of frustrated employees to start businesses (and cause employers to rethink their benefits packages to keep staff around), but it might also create more female entrepreneurs in particular.
Bailey's analysis showed that Obamacare made young people in general more likely to start their own ventures, but it also revealed that the liberating effects of parental health insurance had a particularly large effect on the choices of young women.
"Women are more sensitive to the safety net in general," Sarah Hamersma, an economist at Syracuse University, told the New York Times by way of explaining this finding. Her own research has confirmed the effect, showing "that when states expanded Medicaid eligibility, single mothers who had insurance through their employers were more likely to change jobs."
Do you buy the idea that untying insurance from traditional employment will create new entrepreneurs?