PARTICIPANTS

Casey Mulligan, Michael Boskin, Gary Becker, John Cogan, Sebastian Di Tella, John Gunn, Rick Hanushek, Dan Kessler, Pete Klenow, Pablo Kurlat, Stephen Langlois, Ed Lazear, Nicholas Petrosky-Nadeau, John Raisian, John Shoven, George Shultz, John Taylor, Emily Warren, Ian Wright

ISSUES DISCUSSED

Casey Mulligan, professor at the University of Chicago, discussed his work on the Affordable Care Act (i.e. ACA/“Obamacare”) and labor markets. To begin, Mulligan pointed out that due to the nature of the ACA, specifically the subsidies as a function of income, there are incentives for lower income workers to work less hours and earn less income in order to qualify for the government healthcare subsidies. While economists are not discussing the ACA as a law creating numerous employment taxes, fundamentally that is what it is doing. Indeed, in some scenarios households that work less can end up with more income than they would have had if they worked more. Mulligan then discussed the different models he has used to measure the effects of different provisions of the ACA on labor markets. Presenting the results from these models, he explained that not only does the ACA decrease the incentive to work for lower income people, but it increases the incentive to work for higher income people, but that this is because the latter group now needs to make up for their loss of income due to higher premiums and out of pocket healthcare costs. Indeed, as the reward to work decreases, the quantity of labor will decrease, while the quality will increase because those at the low-end of the skill/income distribution reduce their hours and/or drop out of the labor force. Mulligan also warned against popular studies that may be done in the future to argue that the ACA has a positive effect on the economy. The argument may be made that the ACA increased the quality of labor, whereas in reality this is due to lower skilled workers reducing their work hours to qualify for higher levels of government subsidization. Additionally, the ACA was implemented at the same time as the Emergency Unemployment Compensation (EUC) was ended. The cessation of the latter should, Mulligan argued, cause an increase in growth and the incentive to work which some economists may wrongly attribute to the ACA.

Upcoming Events

Monday, September 23, 2024 3:30 PM
The Distinct Role of the Brazilian Supreme Court
For the past 20 years, the Brazilian Supreme Court has become one of the most influential political players in the nation. In the name of democracy… Shultz Auditorium, George P. Shultz Building
Tuesday, September 24, 2024 12:00 PM PT
Washington DC hi-tech smart city background. 3D rendering. stock photo
The Digitalist Papers: Artificial Intelligence And Democracy In America
On Tuesday, September 24th, 2024 at 12:00 PM PT, Stanford Institute for Human-Centered Artificial Intelligence will celebrate the launch of the… David & Joan Traitel Building, Hoover Institution
Tuesday, October 1, 2024 3:00 PM
BigIdeas_v2.jpg
Increased Prosperity on a Livable Planet
Please join us for a fireside chat with Ajay Banga, President of the World Bank Group on Tuesday, October 1, 2024 at Hauck Auditorium, Hoover… Hauck Auditorium, Hoover Institution
overlay image