Health Insurance and the Supply of Entrepreneurs: New Evidence from the Affordable Care Act's Dependent Coverage Mandate

46 Pages Posted: 9 Mar 2013 Last revised: 24 Mar 2017

James B. Bailey

Creighton University - Department of Economics; Temple University - Department of Economics

Date Written: March 22, 2017

Abstract

Is the difficulty of purchasing health insurance as an individual or small business a major barrier to entrepreneurship in the United States? I answer this question by taking advantage of the natural experiment provided by the Affordable Care Act’s dependent coverage mandate, which allowed many 19-25 year-olds to acquire health insurance independently of their employment. Using a difference-in-difference strategy, I find that the dependent coverage mandate did not increase self-employment among young adults overall, but increased self-employment among disabled young adults by 19-23%.

Keywords: Health Insurance, Self-Employment, Entrepreneurship Lock, Affordable Care Act, Dependent Coverage Mandate

JEL Classification: L26, J20, I13, I18, M13

Suggested Citation

Bailey, James B., Health Insurance and the Supply of Entrepreneurs: New Evidence from the Affordable Care Act's Dependent Coverage Mandate (March 22, 2017). Available at SSRN: https://ssrn.com/abstract=2230099 or http://dx.doi.org/10.2139/ssrn.2230099

James B. Bailey (Contact Author)

Creighton University - Department of Economics ( email )

2500 California Plaza
Omaha, NE 68178
United States

Temple University - Department of Economics ( email )

Philadelphia, PA 19122
United States

HOME PAGE: http://sites.temple.edu/jamesbailey/

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