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Wedges, Labor Market Behavior, and Health Insurance Coverage under the Affordable Care Act

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  • Trevor S. Gallen
  • Casey B. Mulligan

Abstract

The Affordable Care Act’s taxes, subsidies, and regulations significantly alter terms of trade in both goods and factor markets. We use a multi-sector (intra-national) trade model to predict and quantify consequences of the Affordable Care Act for the incidence of health insurance coverage and patterns of labor usage. If and when the new exchange plans are competitive with employer-sponsored insurance (ESI), our model suggests that more than 20 million people will leave ESI as a consequence of the law. Behavioral changes that are captured in the model could add about 3 million participants to the new exchange plans: beyond those that would participate solely as the result of employer decisions to stop offering coverage and beyond those who would have been uninsured. Industries and regions will grow, decline, and change coverage on the basis of their relative demand for skilled labor.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 19770.

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Date of creation: Dec 2013
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Handle: RePEc:nbr:nberwo:19770

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  1. Bulent Unel, . "Analyzing Skilled and Unskilled Labor Efficiencies in the US," Departmental Working Papers, Department of Economics, Louisiana State University 2008-04, Department of Economics, Louisiana State University.
  2. Daron Acemoglu, 2002. "Technical Change, Inequality, and the Labor Market," Journal of Economic Literature, American Economic Association, American Economic Association, vol. 40(1), pages 7-72, March.
  3. Richard V. Burkhauser & Sean Lyons & Kosali I. Simon, 2011. "The Importance of the Meaning and Measurement of “Affordable” in the Affordable Care Act," NBER Working Papers 17279, National Bureau of Economic Research, Inc.
  4. Arnold C. Harberger, 1962. "The Incidence of the Corporation Income Tax," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 70, pages 215.
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