Health Insurance and the Supply of Entrepreneurs: New Evidence from the Affordable Care Act's Dependent Coverage Mandate

James B. Bailey
2013 Social Science Research Network  
Is the diculty of purchasing health insurance as an individual or small business a major barrier to entrepreneurship in the United States? I answer this question by taking advantage of the natural experiment provided by the Aordable Care Act's dependent coverage mandate, which allowed many 19-25 year olds to acquire health insurance independently of their employment. This mandate provides a means to estimate the number of potential entrepreneurs discouraged by the current system of
more » ... d health insurance. A dierence-in-dierence strategy nds that the dependent coverage mandate led to a 13-24% increase in self-employment among the treated group. The eect is found to be larger for women and for unincorporated businesses. An instrumental variables strategy nds that those actually receiving health insurance coverage as dependents were much more likely to start businesses.
doi:10.2139/ssrn.2230099 fatcat:xf7nfophivcrhmzdt2u3j6ibmq