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The ACA: Some Unpleasant Welfare Arithmetic

Casey Mulligan

No 20020, NBER Working Papers from National Bureau of Economic Research, Inc

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.

JEL-codes: E24 H21 I38 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ger, nep-hea, nep-ias, nep-lma and nep-mac
Date: 2014-03
Note: EFG HE LS PE
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Working Paper: The ARRA: Some Unpleasant Welfare Arithmetic (2012) Downloads
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