• Is Obamacare leading to more part time workers?

    There’s no doubt that there seems to be a built-in inducement in the ACA for large employers to favor part time workers over full time workers. The employer penalty specifically seems to be biased in favor of the former over the latter. But we like data over theory. There’s an interesting post over at Angry Bear that shows that the evidence doesn’t favor the idea that part time workers are replacing full time workers:

    So far this cycle part time employment is growing slower than full time employment so  part time employees share of employment is falling.  Part time share of employment seems to be following a normal cyclical development of surging during recession and declining during the recovery.   At a minimum this ratio says that shift full time employees to part time employees is not large enough to show up in the  the data.

    Clipboard01 PARTTIME

    Or, take these data, which show changes in the average workweek by industry:

    Over the past year only 3 of the 13 industries have experienced a drop in the average workweek while the workweek lengthened for 10 industries. In the table goods producing and service producing are sub categories, not individual industries.

    Clipboard01 table

    While many (including myself) have feared that the employer penalty could lead to negative consequences in terms of full-time hiring, that just doesn’t appear to be happening.


    UPDATE: Josh Barro makes the excellent point that retail (where you’d expect to see the dropoff) is seeing a reduction in hours. The blog post I reference argues that manufacturing increases are balancing this out. This is likely one of those things that is true for some, but not for others. You can always cherry pick. The point is that certain workers (perhaps a minority) are affected. There are always tradeoffs in policy. I think the larger point is to recognize that this is not a widespread phenomenon felt across all industries.

    • The issue isn’t so much part-time employment, but so-called temporary employment. A friend of mine’s had his “temporary” job for more than a year now. He works full time but he doesn’t receive any of the benefits a “real” full-time employee would get. No health insurance, no sick days, no paid time off of any kind, very little employee protection.

      They keep renewing his contract — which is better than becoming unemployed, I guess — but it’s no way to live.

    • One question I would like addressed is whether this shift to part-time is necessarily bad. I think the evidence ultimately will support the idea that Obamacare encourages that set of working arrangements over full-time but the unstated assumption by opponents (and even some supporters of Obamacare) is that this transition is inarguably bad. Is there any strong evidence of this (rather than say personal preference)? Isn’t it possible that at least some portion of workers would prefer a more flexible working setup and that the economy will adjust to a new equilibrium?

    • Still I think that we can all agree that the employer mandate is very bad policy and as employer mandates go it is very badly structured.

    • I work for a school corporation who has just told all of the teacher assistants that they can no longer do more than one service (like coaching after school), since that would make them full-time and therefore eligible for insurance. What are your thoughts on encouraging our corporation to offer insurance. It makes me so angry that:
      1. People blame Obama for this instead of placing the blame on the corporation for being too greedy to offer insurance to people when they should have been doing that in the first place.
      2. People are willing to let others go without insurance all while complaining that we (taxpayers) have to pay for people who go to the emergency room to get care since they are uninsured.

    • -The simpler the phenomenon you are studying, the more dependable a strictly empirical approach will be. Conversely, the more complex a system is, the less reliable strictly empirical approaches become and the more you have to incorporate broad logical principles into your analysis.You can’t assume that only one parameter (or a small number of them) is changing while everything else remains constant.

      If we opt for the latter approach, we can conclude that the magnitude of the effect of the mandate on full-time vs part-time employment and total hours worked will be small amongst, say, sectors/employers where employees are already covered with ACA compliant insurance policies.

      On the opposite side of the spectrum – we can rule out an effect on the cohort of the labor market that is exempt from the mandate. We can also expect that the effect on employees who are already part time or who are already working 30 hours a week or less to be difficult to capture via the above metrics.

      Under this framework you *would* expect to see a significant effect in those sectors where full time employment is customary, insurance has been optional or not provided, and where the cost of the mandate is high relative to annual wages, and operating margins are low. I wouldn’t expect to see any Boeing machinists or ILWU crane operators effected by the ACA, but I’d expect a significant effect amongst, say, retailers large enough to be subject to the mandate, restaurant chains, janitorial service companies, etc, etc, etc.