June 12, 2017
It’s a bit painful to see this piece in the NYT this morning, which tells readers that the Affordable Care Act gave workers the flexibility to leave jobs they didn’t like and to retire early. The latter option is especially important for people in bad health, who desperately need insurance, but often could not get it outside of employment before the ACA.
The reason it is painful to see this piece is because this benefit of the ACA is pretty damn obvious. There is an extensive literature dating back a quarter century about “job lock,” the idea that workers will be stuck in jobs they would otherwise leave, but can’t because they need the health insurance it provides. In addition to extending insurance coverage to people who did not already have it, the ACA largely ended job lock by allowing people to get relatively affordable policies through either Medicaid or the exchanges.
This flexibility is a huge deal in the U.S. labor market. More than five million people lose or leave their job every single month. It matters hugely that these people don’t have to worry about losing health care insurance for themselves and their families.
The ACA clearly gave workers this security. This can be easily shown in the surge in voluntary part-time employment that followed the creation of the exchanges and expansion of Medicaid in 2014. CEPR has been virtually alone in trying to call attention to this fact (e.g. here, here, here, and here). In particular, we pointed out that there were large increases in voluntary part-time among young parents (mostly mothers) and older workers, as highlighted in this NYT piece.
For some reason, the Obama administration and Democrats in Congress had no interest in highlighting this benefit of the ACA. I don’t know the reason for their not wanting to take credit for one of the main benefits of the program, but I do have a guess. Many of the parents choosing to work part-time were African American or Hispanic. (The older workers were more likely to be white.) The Democrats may not have wanted to have the ACA thought of as a policy that allowed non-white people to work less than they would have otherwise.
I have no idea if this actually explains the Democrats’ behavior (I’m open to other explanations), but it is the best one I can think of. Anyhow, the flexibility the ACA gives to workers is a huge huge deal. It is amazing that the Democrats never chose to highlight this benefit of the program.
Comments