The ACA worsened job lock.

As far as we are aware, ours is the first study to examine whether the ACA accom- plished one of its primary goals, to reduce job lock due to fears of losing insurance. We confirm the presence of job lock before and after the ACA took full effect in 2014. Drawing on the prior methodology and identification strategies used to identify job lock, which also allows us to provide estimates for the pre-ACA period consistent with that in the literature, our results imply that the ACA has not significantly affected job mobility nor the perceived value of ESI. This is consistent with Heim and Lurie (2015), who found that ACA-like reforms in Massachusetts in 2006 did not increase job mobility.

In fact, our point estimates suggest that job lock actually got stronger following the ACA. One possible explanation for our finding is that the ACA’s individual mandate made insurance even more desirable by fining the uninsured. Another possibility is that workers continue to value employer-provided health insurance more over time as premiums continue to rise.

It is possible that our identification strategy, like that of much of the previous literature, is not estimating the causal effect of employer-provided health insurance on job mobility. Those with pre-existing conditions, or whose spouses have employer-provided health insurance, likely differ from others in ways we cannot fully control for, and which may also influence job mobility. It is further possible, though less likely, that these group differences changed around 2014 in ways that influence our evaluation of the ACA. However, our best attempt at estimating the causal effect of the ACA suggests it did not improve job mobility, and it is certainly clear in the raw data that job mobility remains much higher among workers without employer-provided health insurance compared to workers with employer-provided health insurance.

How big a problem is this? Dey and Flinn (2005) argue that job lock is actually efficient in most cases, and that job mobility is lower for those with ESI because the insurance prevents them from getting so sick they lose their jobs. Gallagher et al. (2020) find similar productivity-increasing effects of health insurance using more recent data. However, the general consensus among economists, as well as proponents of the ACA, has been that job lock is inefficient, trapping people in jobs they otherwise do not like, and perhaps keeping them from finding the job where they could be most productive and contribute the most to society. To the extent that job lock is inefficient, our results suggest that the magnitude of the problem is large, and that it has not been alleviated by the ACA. We show that job lock is still here, and so if policymakers think it is a problem, further action would be needed to address it.