Affordable Care Act and the Post-Displacement Labor Supply among the Near-Elderly

Published: 2017
Project ID: UM17-17


This project will study how the Affordable Care Act (ACA) affects the labor supply of near-elderly, post-displacement workers in the Displaced Workers Survey. Before the ACA, displaced workers who needed health insurance had strong incentives to find jobs (with health insurance coverage) as soon as possible. Such incentives are likely weakened after the onset of ACA, as displaced workers can now obtain health insurance coverage outside employment. In this vein, the expanded coverage operates in a mechanism similar to extended unemployment insurance (UI) benefits. Extended UI benefits have been shown to facilitate longer job searches as well as better job matches and higher earnings upon re-employment, and the ACA should have similar effects. Using a differences-in- differences model, the project will rely on the variation in timing of Medicaid expansion to identify the impact of ACA on displaced workers. Main outcomes are the duration of unemployment spells and the quality of re-employment job.


Chichun Fang