Does Health-Care Reform Support Self-Employment?

Health insurance access is an important factor in individuals ’ labor market decisions. A majority of workers in the United States receive health insurance through employers. This creates a strong relationship between paid-employment and access to health in-surance. Some economists argue that employer-provided health insur-ance has been a barrier to entrepreneurship, as self-employed individuals might have had more difficulty obtaining health insurance on their own. The Patient Protection and Affordable Care Act (PPACA) stipu-lates major changes to the health-care system with the goal of decreas-ing the nation’s uninsured rate. These changes break the traditional link between employment and health insurance access by introducing ad-ditional options to purchase insurance outside of employer-provided coverage. By improving health insurance access, the PPACA might af-fect the self-employment rate in the United States. This article examines the effects of improved health insurance ac-cess on the rate of self-employment using evidence from the health-care reform enacted in 2006 in Massachusetts. The Massachusetts Health Care Reform Act and the PPACA share many similarities, providing a case study. This article finds that the uninsured rate for working-age individuals in Massachusetts declined following the adoption of the Didem Tüzemen is an economist at the Federal Reserve Bank of Kansas City. Thealexa Becker is a research associate at the bank. This article is on the bank’s website at www