The Affordable Care Act and the New Economics of Part-Time Work

47 Pages Posted: 7 Jun 2018

See all articles by Casey B. Mulligan

Casey B. Mulligan

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

Date Written: 10/07/2014

Abstract

The Affordable Care Act (ACA) imposes several types of incentives that will affect work schedules. The largest of them are (1) an explicit penalty on employers who do not offer coverage to their full-time employees; (2) an implicit tax on full-time employment, stemming from the fact that full-time employees at employers that offer affordable coverage are ineligible to receive subsidies on the law's new health insurance exchanges; and (3) an implicit tax on earnings, stemming from the provisions of the law that give lower subsidies to those with higher incomes. The labor market will likely adjust to the various new costs by reducing weekly employment per person by about 3%. The tax incentives will push some workers to work more hours per week (for the weeks that they are on a payroll), and others to work fewer. According to the model presented in this paper, the ACA's incentives and ultimately its behavioral effects will vary substantially across groups, with the elderly experiencing hardly any new incentives and female workers being most likely to cut their work schedules to 29 hours per week.

Suggested Citation

Mulligan, Casey B., The Affordable Care Act and the New Economics of Part-Time Work (10/07/2014). MERCATUS WORKING PAPER. Available at SSRN: https://ssrn.com/abstract=3191378 or http://dx.doi.org/10.2139/ssrn.3191378

Casey B. Mulligan (Contact Author)

University of Chicago ( email )

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National Bureau of Economic Research (NBER)

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