Ever since passage of the Affordable Care Act in 2010, opponents have warned that it would be a job killer.
At that time, with the national unemployment rate above 9 percent and the economy still struggling to recover after the Great Recession, this was a particularly worrisome concern. But five years later, though the unemployment rate now is around 5 percent, that argument still is being made.
At the Republican presidential candidate debate in August, for example, Jeb Bush said our nation should “get rid of Obamacare and replace it with something that doesn’t suppress wages and kill jobs.”
The evidence simply does not support the implication that the ACA has killed jobs.
In a recent analysis, we sought answers to a couple of simple questions about the impact of the ACA on the labor market. First, is there any evidence that the availability of subsidies in the health insurance marketplaces and the expansion of Medicaid in 2014 made a difference in employment? Second, is there any evidence that employment is lower in states that expanded Medicaid during the implementation of the ACA than in those that did not?
The results of our analysis are unequivocal. There is no evidence that the ACA has adversely affected the size of the labor force or the number of people working. This finding applies not only to the ACA as a whole, but also when we separately look at the effect of the Medicaid expansions.
There is no evidence, for example, that employment in Illinois is lower today because Illinois expanded Medicaid. Indeed, between August 2010 and August 2015, the unemployment rate in Illinois declined more than it did in Wisconsin — a state that has not expanded Medicaid. Michigan also expanded Medicaid, and it has experienced the largest decline in unemployment among Illinois’ neighbors.
Even looking at persons with a high school education or less — those most likely affected by the ACA’s subsidies and expansion of Medicaid — we find no adverse effect on employment. In fact, through 2014, the ACA appears to be associated with a 1.8 percentage point increase in employment among non-elderly adults with a high school education or less.
Thus, far from killing jobs, the ACA actually appears to have a beneficial effect on employment for these people.
The only hint that the ACA reduced work effort relates to working part-time, which we define as working less than 30 hours a week. Among low-educated adults, the proportion of persons working less than 30 hours a week is about 6 percent higher than expected.
One possible explanation is that some people have voluntarily reduced hours of work now that they have access to health insurance through the ACA. If this is indeed a choice, then the policy has made people better off because they now have more time to raise their children or care for a family member instead of working full time largely to maintain their health insurance benefits. It could also be that some employers are reducing workers’ hours below 30 hours a week. In any case, very few workers are affected and there is no effect on the number of hours worked in 2014 overall.
Nobody can predict the future, and the ACA may eventually hurt employment, perhaps once the mandate that employers provide health insurance becomes fully effective. But to date, there is no evidence that the ACA has been a job killer, nationally or in Illinois.
On the contrary, there is substantial evidence that the ACA has made many people better off. Largely because of the ACA, approximately 16 million fewer people are without health insurance now than in 2013. So far, this large benefit has not come at a cost of fewer jobs.
Robert Kaestner is a professor at the University of Illinois Institute of Government and Public Affairs and UIC. Bowen Garrett is a senior fellow at the Urban Institute’s Health Policy Center.
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