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The Affordable Care Act, Labor Supply, and Social Welfare

Author

Listed:
  • Jane G. Gravelle
  • Sean Lowry

Abstract

This paper converts Congressional Budget Office estimates of the labor supply effects of the Affordable Care Act (ACA) into social welfare effects for each of the major individual provisions of the law. The sum of these negative, individual welfare effects can be reduced, almost to zero, by utilizing alternative assumptions about labor supply elasticities and the ability of individuals to perceive changes in marginal tax rates. Incorporation of previous estimates of the welfare-enhancing aspects of the ACA would likely outweigh the small, negative (and possibly negligible) welfare losses caused by the law’s labor supply distortions.

Suggested Citation

  • Jane G. Gravelle & Sean Lowry, 2016. "The Affordable Care Act, Labor Supply, and Social Welfare," National Tax Journal, National Tax Association;National Tax Journal, vol. 69(4), pages 863-882, December.
    • Handle: RePEc:ntj:journl:v:69:y:2016:i:4:p:863-882
    DOI: 10.17310/ntj.2016.4.07
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    Cited by:

    1. David E. Frisvold & Younsoo Jung, 2018. "The impact of expanding Medicaid on health insurance coverage and labor market outcomes," International Journal of Health Economics and Management, Springer, vol. 18(2), pages 99-121, June.

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