“The Affordable Care Act (ACA) presents employers and potential employees with a variety of new rewards and penalties. These are, in part, exactly what the law intended: by penalizing potential employees for not purchasing health insurance, and employers for not providing it, the law aims to increase the fraction of the population with health insurance.
Yet these same rewards and penalties have additional effects, including on the incentive to work; Mulligan
(2014), for example, suggests that the ACA may reduce employment by 3 percent on average and have a range of
positive and negative effects on average hours worked.
In the work summarized here, I quantify the number of people who will have essentially no short-term financial reward from working more than 29 hours, since this would either render them ineligible for the ACA’s assistance or increase
the penalties that may be owed by their employer.
This is the first paper to show that the ACA will put millions of workers in the economically extreme situation of having
zero short-term financial reward (or less) to working full-time rather than part-time.”