The Employer Penalty, Voluntary Compliance, and the Size Distribution of Firms: Evidence from a Survey of Small Businesses

81 Pages Posted: 17 Aug 2018

See all articles by Casey B. Mulligan

Casey B. Mulligan

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

Multiple version iconThere are 3 versions of this paper

Date Written: June 29, 2018

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, health insurance, size distribution of firms

JEL Classification: D22, H25, H32

Suggested Citation

Mulligan, Casey B., The Employer Penalty, Voluntary Compliance, and the Size Distribution of Firms: Evidence from a Survey of Small Businesses (June 29, 2018). Mercatus Research Paper. Available at SSRN: https://ssrn.com/abstract=3232850 or http://dx.doi.org/10.2139/ssrn.3232850

Casey B. Mulligan (Contact Author)

University of Chicago ( email )

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