Working Paper: NBER ID: w20020
Authors: Casey B. Mulligan
Abstract: Under the Affordable Care Act, between six and eleven million workers would increase their disposable income by cutting their weekly work hours. About half of them would primarily do so by making themselves eligible for the ACA's federal assistance with health insurance premiums and out-of-pocket health costs, despite the fact that subsidized workers are not able to pay health premiums with pre-tax dollars. The remainder would do so primarily by relieving their employers from penalties, or the threat of penalties, pursuant to the ACA's employer mandate. Women, especially those who are not married, are more likely than men to have their short-term financial reward to full-time work eliminated by the ACA. Additional workers, beyond the six to eleven million, could increase their disposable income by using reduced hours to climb one of the "cliffs" that are part of the ACA's mapping from household income to federal assistance.
Keywords: Affordable Care Act; labor supply; health insurance subsidies; employment penalties
JEL Codes: E24; H21; I38
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Affordable Care Act (ACA) (G52) | reduce work hours (J22) |
| reduce work hours (J22) | increase disposable income (E25) |
| Affordable Care Act (ACA) (G52) | women reduce work hours (J22) |
| employer penalties (J32) | disincentive for full-time work (J22) |
| Affordable Care Act (ACA) (G52) | implicit tax on full-time employment (H31) |