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Market-Based Solutions to Vital Economic Issues
Research
May 31, 2019

Entrepreneurship Rates and Health Insurance Dependent Coverage Mandates

Abstract

Does the availability of health insurance for young adults affect entrepreneurial behavior? This paper proposes that policy effects may go beyond the binary, and shape choices around entrepreneurial form, such as incorporation. I use the adoption of 38 dependent coverage mandates in 31 states, passed from 1986 to 2013, and the adoption of a federal mandate in 2010 to analyze the relationship between non-employer provided insurance and entrepreneurial activity. I find a positive relationship between the 2010 federal mandate and unincorporated entrepreneurship, and negative relationships between state and federal mandates and incorporated entrepreneurship. These results suggest that while a reduction in job lock through non-employer insurance for young adults may encourage unincorporated entrepreneurship, it may also lower participation in incorporated entrepreneurship.

Note: Research papers posted on SSRN, including any findings, may differ from the final version chosen for publication in academic journals.


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