The Affordable Care Act Negatively Impacts the Supply of Labor

Labor market distortions are common within the Patient Protection and Affordable Care Act (PPACA/Obamacare). Employers are faced with uncertainty at every turn. As observed from the recently released Federal Reserve beige book, this uncertainty restrains hiring. While substantial attention has been given to the employer side, the employee side also experiences many distortionary effects. Some of these distortions include incentives to reduce hours, not seek work, drop insurance coverage, drop dependent coverage, become divorced, or avoid marriage. It is apparent that Obamacare’s effects extend far past the number of employees a business will employ, or how many hours a week an employee will be allowed to work.

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