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Mandate-Based Health Reform and the Labor Market: Evidence from the Massachusetts Reform

Author

Listed:
  • Jonathan T. Kolstad

    (University of Pennsylvania)

  • Amanda E. Kowalski

    (Yale University)

Abstract

We model the labor market impact of the key provisions of the national and Massachusetts "mandate-based" health reforms: individual mandates, employer mandates, and subsidies. We characterize the compensating differential for employer-sponsored health insurance (ESHI) and the welfare impact of reform in terms of "sufficient statistics." We compare welfare under mandate-based reform to welfare in a counterfactual world where individuals do not value ESHI. Relying on the Massachusetts reform, we find that jobs with ESHI pay $2,812 less annually, somewhat less than the cost of ESHI to employers. Accordingly, the deadweight loss of mandate-based health reform was approximately 8 percent of its potential size.

Suggested Citation

  • Jonathan T. Kolstad & Amanda E. Kowalski, 2014. "Mandate-Based Health Reform and the Labor Market: Evidence from the Massachusetts Reform," Upjohn Working Papers 15-219, W.E. Upjohn Institute for Employment Research.
    • Handle: RePEc:upj:weupjo:15-219
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    More about this item

    Keywords

    Affordable Care Act; Massachusetts health reform; welfare effects;
    All these keywords.

    JEL classification:

    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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