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Title: Employer Mandates and Firm Dynamics

Citation Type: Miscellaneous

Publication Year: 2018

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Abstract: I examine the consequences of health insurance mandates on firm size distributions by developing a conceptual framework adapted from the model presented in Melitz (2003). Within the framework of my model, I arrive at three main results. First, I find that imposing an employer mandate on firms encourages entry for smaller, less productive firms that would not be affected by the mandate. My second finding is that revenues gained through fines imposed by the mandate can be used to lower corporate taxes without creating a budget deficit. Finally, I find that imposing an employer mandate increases aggregate price levels, which harms consumer welfare. I estimate that one would need to increase consumption by 6.8 percent to fully compensate a consumer for welfare losses brought about by these higher aggregate price levels. While my model is used to examine the Employer Mandate, it can be adapted to examine a large class of size-specific policies.

Url: http://www.colby.edu/econ/wp-content/uploads/sites/73/2018/08/kb_thesis-4.pdf

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Authors: Barnatchez, Keith

Publisher: Colby College

Data Collections: IPUMS USA

Topics: Other

Countries: United States