Obamacare Encourages Some Risky Behavior -- And That's A Good Thing

Obamacare Encourages Some Risky Behavior -- And That's A Good Thing

Last September, Josh Barro wrote a piece about the ways in which the Affordable Care Act would "change the way [people] work and retire," for the good and bad. Here's one thing that Barro slotted for the "win" column:

Freed from the search for health insurance, people might do better and more productive work. Economists call the current phenomenon "job lock": People decline to take more appropriate job opportunities or start their own businesses because they do not wish to lose their current health coverage.

"Job lock" used to be a thing that Republicans fairly explicitly opposed, but times have changed and the party that once decried it now decries the efforts to ameliorate it. This is a phenomenon noted by The New York Times Magazine's Shaila Dewan:

But in reality, many Republicans have long talked about the need to liberate workers from job lock, and conservative arguments against the Affordable Care Act willfully ignore the fact that giving workers more freedom benefits a favorite constituency: Would-be entrepreneurs. These future innovators might just be chained to their corporate gigs, unable to boost the economy with small-business hiring. Access to health insurance outside of work should enable them to take the leap.

Dewan continues:

James Bailey, a graduate student in economics at Temple University, came up with a clever way to test that theory: he looked at what happened to 19- to 25-year-olds when the Affordable Care Act made it possible for them to stay on their parents’ health insurance plans, beginning in 2010. Those who got the coverage, he found, were two to three times more likely to go into business for themselves. And that increase was largely driven by women, who are generally more risk-averse than men.

I am reminded of a line from one of the big speeches of the 2012 election cycle: "Business and growing jobs is about taking risk, sometimes failing, sometimes succeeding, but always striving. It's about dreams. Usually it doesn't work out
exactly as you might have imagined. Steve Jobs was fired at Apple, and then he came back and changed the world."

That quote was from Mitt Romney at the 2012 Republican National Convention. What can I say? When it comes to loosing America's entrepreneurial spirit from the shackles of job lock, Obamacare was one of Mitt Romney's better ideas.

How Obamacare Could Unlock Job Opportunities [NYT Magazine]

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