IDEAS home Printed from https://ideas.repec.org/a/spr/empeco/v65y2023i3d10.1007_s00181-023-02369-y.html
   My bibliography  Save this article

Did the Massachusetts Health Reform Program increase self-employment?

Author

Listed:
  • Debdeep Chattopadhyay

    (University of Padova)

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.

Suggested Citation

  • Debdeep Chattopadhyay, 2023. "Did the Massachusetts Health Reform Program increase self-employment?," Empirical Economics, Springer, vol. 65(3), pages 1309-1344, September.
    • Handle: RePEc:spr:empeco:v:65:y:2023:i:3:d:10.1007_s00181-023-02369-y
    DOI: 10.1007/s00181-023-02369-y
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s00181-023-02369-y
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s00181-023-02369-y?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Bhashkar Mazumder & Sarah Miller, 2016. "The Effects of the Massachusetts Health Reform on Household Financial Distress," American Economic Journal: Economic Policy, American Economic Association, vol. 8(3), pages 284-313, August.
    2. Melvin Stephens Jr. & Dou-Yan Yang, 2014. "Compulsory Education and the Benefits of Schooling," American Economic Review, American Economic Association, vol. 104(6), pages 1777-1792, June.
    3. Fairlie, Robert W. & Kapur, Kanika & Gates, Susan, 2011. "Is employer-based health insurance a barrier to entrepreneurship?," Journal of Health Economics, Elsevier, vol. 30(1), pages 146-162, January.
    4. Bruno Ferman & Cristine Pinto & Vitor Possebom, 2020. "Cherry Picking with Synthetic Controls," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 39(2), pages 510-532, March.
    5. Thomas C. Buchmueller & Robert G. Valletta, 1996. "The Effects of Employer-Provided Health Insurance on Worker Mobility," ILR Review, Cornell University, ILR School, vol. 49(3), pages 439-455, April.
    6. Faggio, Giulia & Silva, Olmo, 2014. "Self-employment and entrepreneurship in urban and rural labour markets," Journal of Urban Economics, Elsevier, vol. 84(C), pages 67-85.
    7. Ross Levine & Yona Rubinstein, 2017. "Smart and Illicit: Who Becomes an Entrepreneur and Do They Earn More?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 132(2), pages 963-1018.
    8. Alberto Abadie & Javier Gardeazabal, 2003. "The Economic Costs of Conflict: A Case Study of the Basque Country," American Economic Review, American Economic Association, vol. 93(1), pages 113-132, March.
    9. Bradley Heim & Ithai Lurie, 2014. "Does health reform affect self-employment? Evidence from Massachusetts," Small Business Economics, Springer, vol. 43(4), pages 917-930, December.
    10. Stefan Pichler & Nicolas R. Ziebarth, 2020. "Labor Market Effects of U.S. Sick Pay Mandates," Journal of Human Resources, University of Wisconsin Press, vol. 55(2), pages 611-659.
    11. repec:eee:labchp:v:3:y:1999:i:pc:p:3309-3416 is not listed on IDEAS
    12. Raj Chetty & Adam Looney & Kory Kroft, 2009. "Salience and Taxation: Theory and Evidence," American Economic Review, American Economic Association, vol. 99(4), pages 1145-1177, September.
    13. Leora Friedberg, 1998. "Did Unilateral Divorce Raise Divorce Rates? Evidence from Panel Data," NBER Working Papers 6398, National Bureau of Economic Research, Inc.
    14. Holtz-Eakin, Douglas & Penrod, John R. & Rosen, Harvey S., 1996. "Health insurance and the supply of entrepreneurs," Journal of Public Economics, Elsevier, vol. 62(1-2), pages 209-235, October.
    15. Lourenço S. Paz & James E. West, 2019. "Should We Trust Clustered Standard Errors? A Comparison with Randomization-Based Methods," NBER Working Papers 25926, National Bureau of Economic Research, Inc.
    16. Victor Chernozhukov & Kaspar Wüthrich & Yinchu Zhu, 2021. "An Exact and Robust Conformal Inference Method for Counterfactual and Synthetic Controls," Journal of the American Statistical Association, Taylor & Francis Journals, vol. 116(536), pages 1849-1864, October.
    17. Giovanni Peri & Vasil Yasenov, 2019. "The Labor Market Effects of a Refugee Wave: Synthetic Control Method Meets the Mariel Boatlift," Journal of Human Resources, University of Wisconsin Press, vol. 54(2), pages 267-309.
    18. Thomas M. Selden, 2009. "The Impact of Increased Tax Subsidies on the Insurance Coverage of Self-Employed Families: Evidence from the 1996–2004 Medical Expenditure Panel Survey," Journal of Human Resources, University of Wisconsin Press, vol. 44(1).
    19. Abadie, Alberto & Diamond, Alexis & Hainmueller, Jens, 2010. "Synthetic Control Methods for Comparative Case Studies: Estimating the Effect of California’s Tobacco Control Program," Journal of the American Statistical Association, American Statistical Association, vol. 105(490), pages 493-505.
    20. Frean, Molly & Gruber, Jonathan & Sommers, Benjamin D., 2017. "Premium subsidies, the mandate, and Medicaid expansion: Coverage effects of the Affordable Care Act," Journal of Health Economics, Elsevier, vol. 53(C), pages 72-86.
    21. Timothy G. Conley & Christopher R. Taber, 2011. "Inference with "Difference in Differences" with a Small Number of Policy Changes," The Review of Economics and Statistics, MIT Press, vol. 93(1), pages 113-125, February.
    22. Currie, Janet & Madrian, Brigitte C., 1999. "Health, health insurance and the labor market," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 50, pages 3309-3416, Elsevier.
    23. Alberto Abadie & Alexis Diamond & Jens Hainmueller, 2015. "Comparative Politics and the Synthetic Control Method," American Journal of Political Science, John Wiley & Sons, vol. 59(2), pages 495-510, February.
    24. Anil Rupasingha & Stephan J. Goetz, 2013. "Self-employment and local economic performance: Evidence from US counties," Papers in Regional Science, Wiley Blackwell, vol. 92(1), pages 141-161, March.
    25. Jason Henderson & Stephan Weiler, 2010. "Entrepreneurs and Job Growth: Probing the Boundaries of Time and Space," Economic Development Quarterly, , vol. 24(1), pages 23-32, February.
    26. Justin Wolfers, 2006. "Did Unilateral Divorce Laws Raise Divorce Rates? A Reconciliation and New Results," American Economic Review, American Economic Association, vol. 96(5), pages 1802-1820, December.
    27. Alberto Abadie, 2021. "Using Synthetic Controls: Feasibility, Data Requirements, and Methodological Aspects," Journal of Economic Literature, American Economic Association, vol. 59(2), pages 391-425, June.
    28. Jonathan Gruber, 2008. "Massachusetts Health Care Reform: The View From One Year Out," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 11(1), pages 51-63, March.
    29. Scott Jackson, 2010. "Mulling over Massachusetts: Health Insurance Mandates and Entrepreneurs," Entrepreneurship Theory and Practice, , vol. 34(5), pages 909-932, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Robert Messerle & Jonas Schreyögg, 2024. "Country-level effects of diagnosis-related groups: evidence from Germany’s comprehensive reform of hospital payments," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 25(6), pages 1013-1030, August.
    2. Michael Funke & Kadri Männasoo & Helery Tasane, 2023. "Regional Economic Impacts of the Øresund Cross-Border Fixed Link: Cui Bono?," CESifo Working Paper Series 10557, CESifo.
    3. Ayala, Luis & Martín-Román, Javier & Navarro, Carolina, 2023. "Unemployment shocks and material deprivation in the European Union: A synthetic control approach," Economic Systems, Elsevier, vol. 47(1).
    4. Tomasz Serwach, 2022. "The European Union and within-country income inequalities. The case of the New Member States," Working Papers hal-03548416, HAL.
    5. Pier Basaglia & Sophie M. Behr & Moritz A. Drupp, 2023. "De-Fueling Externalities: How Tax Salience and Fuel Substitution Mediate Climate and Health Benefits," Discussion Papers of DIW Berlin 2041, DIW Berlin, German Institute for Economic Research.
    6. Demirci, Murat, 2023. "Youth responses to political populism: Education abroad as a step toward emigration," Journal of Comparative Economics, Elsevier, vol. 51(2), pages 653-673.
    7. Jacqueline Chattopadhyay, 2018. "State Health Insurance Regulation and Self-Employment Rates After the Great Recession: The Role of Guaranteed Issue Mandates," Economic Development Quarterly, , vol. 32(1), pages 78-92, February.
    8. Pier Basaglia & Sophie M. Behr & Moritz A. Drupp, 2023. "De-Fueling Externalities: Causal Effects of Fuel Taxation and Mediating Mechanisms for Reducing Climate and Pollution Costs," CESifo Working Paper Series 10508, CESifo.
    9. Peter Backus & Thien Nguyen, 2021. "The Effect of the Sex Buyer Law on the Market for Sex, Sexual Health and Sexual Violence," Economics Discussion Paper Series 2106, Economics, The University of Manchester.
    10. Tomasz Serwach, 2023. "The European Union and within‐country income inequalities. The case of the new member states," The World Economy, Wiley Blackwell, vol. 46(7), pages 1890-1939, July.
    11. Joseph Fry, 2023. "A Method of Moments Approach to Asymptotically Unbiased Synthetic Controls," Papers 2312.01209, arXiv.org, revised Mar 2024.
    12. Gumus, Gulcin & Regan, Tracy L., 2015. "Self-employment and the role of health insurance in the U.S," Journal of Business Venturing, Elsevier, vol. 30(3), pages 357-374.
    13. Abidemi Adisa & Michael Farmer & Jamie Bologna Pavlik, 2023. "The effect of the Mahathir regime on the Malaysian economy," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 31(1), pages 97-114, January.
    14. Frank M. Fossen & Johannes König, 2017. "Public health insurance, individual health, and entry into self-employment," Small Business Economics, Springer, vol. 49(3), pages 647-669, October.
    15. Nuno Garoupa & Rok Spruk, 2024. "Populist Constitutional Backsliding and Judicial Independence: Evidence from Turkiye," Papers 2410.02439, arXiv.org.
    16. Fossen, Frank M. & König, Johannes, 2015. "Public health insurance and entry into self-employment," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112934, Verein für Socialpolitik / German Economic Association.
    17. Maximiliano Marzetti & Rok Spruk, 2023. "Long-Term Economic Effects of Populist Legal Reforms: Evidence from Argentina," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 65(1), pages 60-95, March.
    18. Stefano, Roberta di & Mellace, Giovanni, 2020. "The inclusive synthetic control method," Discussion Papers on Economics 14/2020, University of Southern Denmark, Department of Economics.
    19. Gabriel, Ricardo Duque & Pessoa, Ana Sofia, 2024. "Adopting the euro: A synthetic control approach," European Journal of Political Economy, Elsevier, vol. 83(C).
    20. Giovanni Peri & Derek Rury & Justin C. Wiltshire, 2024. "The Economic Impact of Migrants from Hurricane Maria," Journal of Human Resources, University of Wisconsin Press, vol. 59(6), pages 1795-1829.

    More about this item

    Keywords

    Health insurance; Self-employment; Synthetic control; Randomization inference; Massachusetts Health Care Reform;
    All these keywords.

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:empeco:v:65:y:2023:i:3:d:10.1007_s00181-023-02369-y. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.