ENTREPRENEURSHIP AND JOB LOCK: THE INTERACTION BETWEEN TAX SUBSIDIES AND HEALTH INSURANCE REGULATIONS

摘要

This paper demonstrates that health insurance tax subsidies increase self-employment, but that the effect differs substantially based on nongroup market regulations and health status. Using the Panel Study of Income Dynamics, I show that households that cannot purchase health insurance because of a preexisting condition do not respond to tax subsidies in states in which they would be denied insurance, but they respond strongly in states in which they face risk-rated premiums. Households respond similarly to tax subsidies in states with nongroup market regulations similar to those established by the Affordable Care Act, regardless of preexisting conditions.