Working Paper: NBER ID: w24037
Authors: Casey B. Mulligan
Abstract: A new survey of 745 small businesses shows little change in the size distribution of businesses between 2012 and 2016, except among businesses with 40–74 employees, in a way that is closely related to whether they offer health insurance coverage. Using measures of both size and voluntary regulatory compliance, the paper links these changes to the Affordable Care Act’s employer mandate. Between 28,000 and 50,000 businesses nationwide appear to be reducing their number of full-time-equivalent employees to below 50 because of that mandate. This translates to roughly 250,000 positions eliminated from those businesses.
Keywords: Affordable Care Act; employer mandate; small businesses; health insurance; employment practices
JEL Codes: D22; H25; H32
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Employer penalty (J32) | Reduction in full-time equivalent employees (J63) |
| Reduction in full-time equivalent employees (J63) | Elimination of positions (J63) |
| Employer penalty (J32) | Changes in hiring practices (J63) |
| Changes in hiring practices (J63) | Reduction in full-time equivalent employees (J63) |
| Employer penalty (J32) | Decision to offer employer-sponsored insurance (ESI) (G52) |