Labor Market Effects of the Affordable Care Act

Paper Session

Friday, Jan. 6, 2017 10:15 AM – 12:15 PM

Hyatt Regency Chicago, Gold Coast
Hosted By: Labor and Employment Relations Association
  • Chair: Katherine Swartz, Harvard University

Health Reform and Retirement

Thomas C. Buchmueller
,
University of Michigan
Helen Levy
,
University of Michigan
Sayeh Nikpay
,
Vanderbilt University

Abstract

We analyze whether there was an increase in retirement or in part-time work among older workers after January 2014, when new health insurance coverage options became available because of the Affordable Care Act. Using data from the Current Population Survey and the Health and Retirement Study, we analyze trends in retirement and part-time work for individuals ages 50 through 64 in from 2008 through 2014. We test for a break in trend in 2014. We also test for differences in trends, both before and after 2014, in states that expanded their Medicaid programs in January 2014 under the Affordable Care Act compared with those that did not. We find that there was no change in the probability of retirement or part-time work among older workers in 2014 and later, either overall or in Medicaid expansion states relative to non-expansion states. Although many observers had predicted that an unintended consequence of health reform would be reduced labor supply, we find no evidence of this for older workers in the first year after the laws major coverage provisions took effect.

Effects of the ACA Medicaid Expansions on Health Insurance Coverage and Labor Supply

Robert Kaestner
,
University of Illinois-Chicago
Bowen Garrett
,
Urban Institute
Anuj Gangopadhyaya
,
University of Illinois-Chicago
Caitlyn Fleming
,
University of Illinois-Chicago

Abstract

We examine the effect of the expansion of Medicaid eligibility under the Affordable Care Act on health insurance coverage and labor supply of adults with a high school education or less. We found that the Medicaid expansions increased Medicaid coverage by approximately 4 percentage points, decreased the proportion uninsured by approximately 3 percentage points, and decreased private health insurance coverage by 1 percentage point. The Medicaid expansions had little effect on labor supply as measured by employment, usual hours worked per week and the probability of working 30 or more hours per week. Most estimates suggested that the expansions increased employment slightly, although not significantly.

Effects of the Affordable Care Act on Part-time Employment: Early Evidence

Marcus Dillender
,
W.E. Upjohn Institute for Employment Research
Carolyn Heinrich
,
Vanderbilt University
Susan Houseman
,
W.E. Upjohn Institute for Employment Research

Abstract

The ACA requires that employers with at least 50 full-time equivalent employees offer employees working 30 or more hours per week "affordable" health insurance. If employers do not comply with the mandate, they may face substantial financial penalties. Although the ACA could significantly improve compensation for many workers, especially low-wage workers, it has sparked concern that employers will circumvent the mandate by reducing weekly hours below the 30-hour threshold or by using other non-standard employment arrangements (e.g., direct-hire temporaries, agency temporaries, small contractors, and independent contractors). In this paper, we examine the effects of the ACA on short-hours, part-time employment, using monthly CPS data. Our empirical strategy employs Hawaii "which has had a more stringent employer health insurance mandate than that in the ACA for several decades as a control group. Using difference-in-difference and triple-difference specifications, we estimate that the ACA resulted in an increase in low-hours, involuntary part-time employment by a half million to a million in retail, accommodations, and food services“ the sectors where, in previous work we argued, employers are most likely reduce hours if they choose to circumvent the mandate. Our findings are robust to placebo tests and alternative specifications.

The Affordable Care Act and the Growth of Involuntary Part-Time Employment

William E. Even
,
Miami University
David Macpherson
,
Trinity University

Abstract

This study tests whether the employer mandate under the Affordable Care Act (ACA) increased involuntary part-time (IPT) employment. Using data from the Current Population Survey between 1994 and 2014, we find that IPT employment in 2014 was higher than predicted based on economic conditions and the composition of jobs and workers in the labor market. More importantly, using difference-in-difference methods, we find that the increase in the probability of IPT employment since 2010 was greatest in the industries and occupations where workers were most likely to be affected by the mandate. We also show that there has been virtually no change in the probability of IPT employment where the number of workers affected by the mandate was small. We estimate that approximately 1 million additional workers between the ages of 19 and 64 are in IPT employment as a result of the ACA employer mandate.
Discussant(s)
Kosali Simon
,
Indiana University Bloomington
Matthew Notowidigdo
,
Northwestern University
JEL Classifications
  • J2 - Demand and Supply of Labor