Health Insurance and the Supply of Entrepreneurs: New Evidence from the Affordable Care Act's Dependent Coverage Mandate
AbstractIs the difficulty of purchasing health insurance as an individual or small business a major barrier to entrepreneurship in the United States? I answer this question by taking advantage of the natural experiment provided by the Affordable Care Actâs dependent coverage mandate, which allowed many 19-25 year olds to acquire health insurance independently of their employment. This mandate provides a means to estimate the number of potential entrepreneurs discouraged by the current system of employer-based health insurance. A difference-in-difference strategy finds that the dependent coverage mandate led to a 13-24% increase in self-employment among the treated group. The effect is found to be larger for women and for unincorporated businesses. An instrumental variables strategy finds that those actually receiving health insurance coverage as dependents were much more likely to start businesses.
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Bibliographic InfoPaper provided by Job Market Papers in its series 2013 Papers with number pba1129.
Date of creation: 06 Dec 2013
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Web page: http://ideas.repec.org/jmp.html
Find related papers by JEL classification:
- L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
- J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
- I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
- I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-12-15 (All new papers)
- NEP-ENT-2013-12-15 (Entrepreneurship)
- NEP-HEA-2013-12-15 (Health Economics)
- NEP-IAS-2013-12-15 (Insurance Economics)
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