Did the Massachusetts Health Reform Program increase self-employment?

Debdeep Chattopadhyay ()
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Debdeep Chattopadhyay: University of Padova

Empirical Economics, 2023, vol. 65, issue 3, No 9, 1309-1344

Abstract: Abstract By providing affordable health insurance untied from employer provision, the Massachusetts Health Reform Program could increase self-employment. Previous studies have estimated both positive and negative effects of the reform on aggregate self-employment using difference-in-differences designs. In this study, I use the synthetic control methodology to confirm the absence of a statistically significant effect of the reform on aggregate self-employment. However, I do detect positive and significant short-run effects of the reform on the probability that individuals become incorporated self-employed. This effect is restricted to individuals 40 years old or younger. I also find that for employees in this age range the reform caused a significant wage reduction. This finding highlights that the higher reform-mandated health insurance coverage was at least in part financed by employees.

Keywords: Health insurance; Self-employment; Synthetic control; Randomization inference; Massachusetts Health Care Reform (search for similar items in EconPapers)
JEL-codes: I11 I13 J18 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s00181-023-02369-y

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