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The ACA: Some Unpleasant Welfare Arithmetic

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  • Casey B. Mulligan

Abstract

Under the Affordable Care Act, between six and eleven million workers would increase their disposable income by cutting their weekly work hours. About half of them would primarily do so by making themselves eligible for the ACA's federal assistance with health insurance premiums and out-of-pocket health costs, despite the fact that subsidized workers are not able to pay health premiums with pre-tax dollars. The remainder would do so primarily by relieving their employers from penalties, or the threat of penalties, pursuant to the ACA's employer mandate. Women, especially those who are not married, are more likely than men to have their short-term financial reward to full-time work eliminated by the ACA. Additional workers, beyond the six to eleven million, could increase their disposable income by using reduced hours to climb one of the "cliffs" that are part of the ACA's mapping from household income to federal assistance.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 20020.

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Date of creation: Mar 2014
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Handle: RePEc:nbr:nberwo:20020

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  9. Casey B. Mulligan, 2014. "The Economics of Work Schedules under the New Hours and Employment Taxes," NBER Working Papers 19936, National Bureau of Economic Research, Inc.
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  11. Chetty, Raj, 2008. "Moral Hazard versus Liquidity and Optimal Unemployment Insurance," Scholarly Articles 9751256, Harvard University Department of Economics.
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  14. Holt, Stephen D. & Romich, Jennifer L., 2007. "Marginal Tax Rates Facing Low– and Moderate–Income Workers Who Participate in Means–Tested Transfer Programs," National Tax Journal, National Tax Association, vol. 60(2), pages 253-76, June.
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As found by EconAcademics.org, the blog aggregator for Economics research:
  1. ACA and EMTRs
    by Eric Crampton in Offsetting Behaviour on 2014-04-11 04:02:00
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Cited by:
  1. Casey B. Mulligan, 2013. "Uncertainty, Redistribution, and the Labor Market," NBER Working Papers 19553, National Bureau of Economic Research, Inc.
  2. Casey B. Mulligan, 2014. "The Economics of Work Schedules under the New Hours and Employment Taxes," NBER Working Papers 19936, National Bureau of Economic Research, Inc.

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