Economics - General Health Reform

Will Obamacare Increase the share of Part-Time Workers?

The ACA requires large employers to provide coverage to all full-time workers. However, providing insurance is costly. Will employers avoid this requirement by hiring more part-time workers? An Urban Institute report claims that this is not the case.

We find no evidence that the ACA had already started increasing part-time work before 2014. We find a small increase in part-time work in 2014 beyond what would be expected at this point in the economic recovery based on prior experience since 2000. This increase in part-time work is fully attributable to an increase in involuntary part-time work.

Does this mean that the ACA will not increase the share of workers who are part-time? My guess is that the ACA will increase the share of workers who are part time, although this effect is more likely to occur gradually over multiple years.

Employers could shift existing workers from full to part-time, but doing so would likely alienate workers and demoralize staff. The other mechanism for increasing the share of part-time workers is hiring part-time workers who replace full time workers after the quit, retire or are fired. The latter approach would not demoralize the current workforce, but would lead to a gradual shift in the share of part-time workers. However, it may take a number of years before there is a noticeable change in the share of part-time workers due to the ACA.

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