Effects of the Affordable Care Act on Part-Time Employment: Early Evidence

Abstract

The Affordable Care Act (ACA) requires employers with at least 50 full-time equivalent employees to offer “affordable” health insurance to employees working 30 or more hours per week. Employers who do not comply may face substantial penalties, but they can circumvent the mandate by reducing employees’ weekly hours below the 30-hour threshold. We examine ACA’s effects on short-hours part-time employment using difference-in-differences models. We find that the ACA increased low-hours, involuntary part-time employment by 500,000–700,000 workers in retail, accommodations, and food services, the industries in which employers are most likely to reduce hours if they choose to circumvent the mandate