Effects of the Affordable Care Act on Part-Time Employment: Early Evidence

34 Pages Posted: 17 Jun 2016 Last revised: 29 Jun 2016

See all articles by Marcus Dillender

Marcus Dillender

University of Illinois at Chicago - School of Public Health - Division of Health Policy and Administration

Carolyn Heinrich

Vanderbilt University; University of Texas at Austin

Susan N. Houseman

W.E. Upjohn Institute for Employment Research

Date Written: June 15, 2016

Abstract

The Affordable Care Act (ACA) requires employers with at least 50 full-time-equivalent employees to offer “affordable” health insurance to employees working 30 or more hours per week. If employers do not comply with the mandate, they may face substantial financial penalties. Employers can potentially circumvent the mandate by reducing weekly hours below the 30-hour threshold or by using other nonstandard employment arrangements (direct-hire temporaries, agency temporaries, small contractors, and independent contractors). We examine the effects of the ACA on short-hours, part-time employment. Using monthly CPS data, we estimate that the ACA resulted in an increase in low-hours, involuntary part-time employment of a half-million to a million workers in retail, accommodations, and food services, the sectors in which employers are most likely to reduce hours if they choose to circumvent the mandate, and also the sectors in which low-wage workers are most likely to be affected. Our empirical strategy uses as a control group Hawaii, which has had a more stringent employer health insurance mandate than that of the ACA for several decades. The findings are robust to placebo tests and alternative specifications.

Keywords: Affordable Care Act, employer-sponsored health insurance, employer mandate, part-time employment, involuntary part-time employment

JEL Classification: I13, J23, J3

Suggested Citation

Dillender, Marcus and Heinrich, Carolyn and Houseman, Susan N., Effects of the Affordable Care Act on Part-Time Employment: Early Evidence (June 15, 2016). Available at SSRN: https://ssrn.com/abstract=2796131 or http://dx.doi.org/10.2139/ssrn.2796131

Marcus Dillender

University of Illinois at Chicago - School of Public Health - Division of Health Policy and Administration ( email )

1603 West Taylor Street
Chicago, IL 60612
United States

Carolyn Heinrich

Vanderbilt University ( email )

2301 Vanderbilt Place
Nashville, TN 37240
United States
615-322-1169 (Phone)

HOME PAGE: http://peabody.vanderbilt.edu/bio/carolyn-heinrich

University of Texas at Austin ( email )

2315 Red River St.
Austin, TX 78713
United States
512-471-3200 (Phone)

HOME PAGE: http://www.utexas.edu/lbj/directory/faculty/carolyn-heinrich

Susan N. Houseman (Contact Author)

W.E. Upjohn Institute for Employment Research ( email )

300 South Westnedge Avenue
Kalamazoo, MI 49007-4686
United States

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