The effects of the affordable care act on labor supply and other uses of time

Abstract A vast literature studies the behavioral impacts of health care reforms, often coming to controversial conclusions. Here we examine the time allocation effects of the Affordable Care Act, also known as Obama Care, focusing on two pillars, namely Medicaid expansion, which increased access to public health insurance, and the Tax Credit Premium, subsidizing the purchase of private health insurance. Using 2012–2015 daily diary data from the American Time Use Survey, we take a difference-in-difference-in-differences approach, which exploits the cross-state variation in the timing of ACA implementation, together with differences in income eligibility thresholds, to identify the effects at stake. Considering a sample of childless adults aged 27–64, a group not eligible for public health insurance before ACA, we find that the Medicaid expansion reduced their labor supply by over an hour per day, increasing part-time work, while the Premium Tax Credit is associated with a slight increase in employment levels. The implications for other uses of time are also analyzed.