The impact of the Affordable Care Act on self‐employment

Abstract

This paper estimates the impact of the implementation of the Affordable Care Act (ACA) in 2014 on the decision to be self-employed. Using data from the Current Population Survey, we employ two identification strategies. Utilizing prereform variation in state nongroup health insurance market regulations, we find that the ACA did not increase self-employment overall in states that lacked similar provisions in their nongroup markets prior to 2014. In specifications that utilize variation across individuals in characteristics that could make it harder for them to purchase insurance if they left their current employer, we also do not find that the ACA differentially increased self-employment. However, in states that lacked the ACA nongroup market provisions, we do find a statistically significant increase in the second year of implementation (when individuals had more time to adjust behavior and the exchanges functioned properly) among individuals eligible for insurance subsidies, suggesting that a combination of time to adjust, low uncertainty and low insurance costs may be necessary for nongroup health insurance reforms to impact self-employment.

State Health Insurance Regulation and Self-Employment Rates After the Great Recession: The Role of Guaranteed Issue Mandates

“…The null GI of All results contrast with Heim and Lurie's (2013) and DeCicca's (2010) findings, but concur with Heim and Lurie's (2014a) evidence that self-employment is insensitive to individual market GI. The GI − 1 results align with Blumberg et al's (2013) contested prediction-see Heim and Yang (2014) and Miller (2016)-that nationwide GI − 1 will boost selfemployment. The GI − 1 finding answers "yes" to Simon's (2008) question of whether self-employment rates are sensitive to regulations that let the SENE shop in the small-group market.…”

“…Contrary to Becker and Tüzemen (2015), Heim and Lurie (2014b) found mixed evidence on the Massachusetts health law's impact on selfemployment. Heim and Yang (2014) and Miller (2016) contended that Blumberg et al's (2013) analysis overestimates the ACA's likely impact on self-employment.…”

Does attention‐deficit hyperactivity disorder medication reduce entrepreneurship?

“…For example, health expenditure correlates with the size of the public sector, which may in turn correlate with the entrepreneurship rate in a country (Aidis, Estrin, & Mickiewicz, 2012;Bjørnskov & Foss, 2008;Nyström, 2008). Health expenditure or policies may also affect entrepreneurship directly (Fairlie, Kapur, & Gates, 2011;Heim & Yang, 2017;Holtz-Eakin, Penrod, & Rosen, 1996).…”

Coverage For Self-Employed And Others Without Employer Offers Increased After 2014

“…2,3 Further, ACA provisions, including the employer mandate, could have changed firms' decisions on whether to offer coverage and therefore the characteristics of adults with employer coverage. Empirical studies have found little or no evidence of significant effects of the ACA on overall work status or hours worked, [4][5][6] people's decisions to become self-employed, 7 or firms' decisions to offer coverage. 8,9 Because our identification strategy assumed that the composition or characteristics of the sample by employment status did not change after ACA implementation, we also conducted our own analysis of post-2014 changes in the probability of being in various employment categories.…”