Wedges, Labor Market Behavior, and Health Insurance Coverage Under the Affordable Care Act

62 Pages Posted: 28 Dec 2013

See all articles by Trevor Gallen

Trevor Gallen

University of Chicago

Casey B. Mulligan

University of Chicago; National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: December 2013

Abstract

The Affordable Care Act's taxes, subsidies, and regulations significantly alter terms of trade in both goods and factor markets. We use a multi-sector (intra-national) trade model to predict and quantify consequences of the Affordable Care Act for the incidence of health insurance coverage and patterns of labor usage. If and when the new exchange plans are competitive with employer-sponsored insurance (ESI), our model suggests that more than 20 million people will leave ESI as a consequence of the law. Behavioral changes that are captured in the model could add about 3 million participants to the new exchange plans: beyond those that would participate solely as the result of employer decisions to stop offering coverage and beyond those who would have been uninsured. Industries and regions will grow, decline, and change coverage on the basis of their relative demand for skilled labor.

Suggested Citation

Gallen, Trevor and Mulligan, Casey B., Wedges, Labor Market Behavior, and Health Insurance Coverage Under the Affordable Care Act (December 2013). NBER Working Paper No. w19770. Available at SSRN: https://ssrn.com/abstract=2372481

Trevor Gallen (Contact Author)

University of Chicago ( email )

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Casey B. Mulligan

University of Chicago ( email )

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Chicago, IL 60637
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773-702-9017 (Phone)
773-702-8490 (Fax)

National Bureau of Economic Research (NBER)

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