Part-time Employment and Health Insurance Reform: What Can Massachusetts Tell Us about the Affordable Care Act?

<p>Experience with health insurance reform in Massachusetts may provide a good forecast of the impact of the Affordable Care Act [ACA] on the growth of part-time employment. Concerns have been expressed that the ACA will lead to growing part-time employment, but it will take several years to observe this effect and whether it is labor demand (firm) or labor supply (worker) initiated. Using state-level data from 1999 to 2012, I treat the 2007 implementation of the new Massachusetts health insurance system as an “experiment” to examine whether it had any differential effect on the growth in part-time employment in the state. A panel estimation including fixed cross-section and period effects reveals that voluntary part-time employment increased in Massachusetts relative to the other states, but reform measures did not have an effect on involuntary part-time employment. The impact of the reform on voluntary part-time employment suggests that some Massachusetts workers found the pre-reform system to be an obstacle to their choice of optimal work hours. The implementation of the ACA, by providing avenues for obtaining health insurance that are not directly tied to employment, may remove this obstacle for workers in other states and make part-time employment a more attractive choice for workers across the U.S.</p>