Health insurance and the supply of entrepreneurs: new evidence from the affordable care act
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Is the difficulty of purchasing health insurance as an individual or small business a major barrier to entrepreneurship in the USA? I answer this question by taking advantage of the natural experiment provided by the Affordable Care Act’s dependent coverage mandate, which allowed many 19–25 year olds to acquire health insurance independently of their employment. Using a difference-in-difference strategy, I find that the dependent coverage mandate did not increase self-employment among young adults overall, but increased self-employment among disabled young adults by 19–23%.
KeywordsHealth insurance Self-employment Entrepreneurship lock Affordable Care Act Dependent coverage mandate
JEL ClassificationL26 J20 I13 I18 M13
This research was funded in part by the Ewing Marion Kauffman Foundation. The contents of this publication are solely the responsibility of James Bailey. Thanks to my committee members (Douglas Webber, Michael Leeds, and Erwin Blackstone), audience members at the Society of Labor Economics 2014, American Economic Association 2014, Eastern Economic Association 2013, Western Economic Association 2013, Southern Economic Association 2013, Temple University, Samford University, the University of Alabama at Birmingham, the University of Tulsa, Louisiana State University, Creighton University, Wayne State University, West Virginia University, and Bentley University, as well as Art Carden, Michael Morrisey, Taylor Jaworski, Anna Chorniy, David Slusky, Norma Coe, Eleanor Lewin, Deepak Hegde, Natarajan Balasubramanian, Scott Stern, David Audretsch, William Kerr, Thomas DeLeire, and anonymous referees for helpful comments.
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