Analysts from all over the political spectrum have long suggested that the Affordable Care Act’s provisions could lead to a reduction in employment numbers. New research suggests that contrary to these expectations, the available data do not support claims that the ACA would lead to a substantial shift from full-time workers to part-time workers. The current evidence also does not support claims that there would be substantially more part-time workers and people leaving the workforce due to the ACA’s provisions expanding Medicaid eligibility.
Many politicians have specifically expressed concern that the ACA’s requirement that companies with 100 or more employees provide health insurance to employees working 30 or more hours per week would lead to companies shifting employees from full-time work to part-time. Republican presidential candidates including Ted Cruz and Donald Trump have stated that they believe Obamacare makes more workers part-time instead of full-time. While campaigning in Iowa, even Hilary Clinton said she believes the ACA created “some unfortunate disincentives that discourage full-time employment.”
A study recently released in the journal Health Affairs found that there is little evidence to support such concerns. Based on nationally representative survey data collected by the Census Bureau, the study found that there was no meaningful increase in part-time work after the ACA requirements went into effect. The authors expected that if predictions about the ACA’s economic effects were true, they would find a large reduction in the proportion of employees working just over 30 hours a week and a large increase in the proportion working just under the ACA’s threshold. Instead, the data lacked support for either of the predicted substantial changes. The expected trends simply did not materialize.
Another study, also released in Health Affairs, similarly found that the ACA’s expansion of Medicaid eligibility did not cause significant changes in employment status. Some had predicted that expanding Medicaid eligibility would lead to significant numbers of low-income adults either switching to work fewer hours or stopping work because they no longer needed to work as many hours to get employer-provided health care. Instead, the study found no significant changes in full-time employment status after the ACA went into effect.
There are of course still numerous anecdotes of employers choosing to limit the hours of their part-time workers in response to the ACA’s requirements. And both studies acknowledged that it might simply be too soon to see all of the effects of the ACA on the labor market. Nevertheless, these studies show that the ACA has so far not had the type of massive negative impact on full-time employment that some people predicted.