Increasing Access to Health Insurance Leads to More Female Entrepreneurs

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VC and PITCH judge Hunter Walk pulls together some intriguing analysis on the effects of Obamacare. 

By Hunter Walk (Partner, Homebrew)

From NYTimes article How Obamacare Could Unlock Job Opportunities:

Were it not for Obamacare, [female entrepreneur Lauren] Braun, 25, would be confronting a phenomenon that economists call “job lock”: when people stay in jobs they dislike, or don’t want, solely to keep their health coverage. A Harvard Business School study in 2008 estimated that 11 million workers are affected by this dilemma. Other studies show that when people don’t have to worry about health insurance, they are up to 25 percent more likely to change jobs.

James Bailey, Econ PhD student, looked at impact of Affordable Care Act:

Is difficulty of purchasing health insurance as an individual or small business a major barrier to entrepreneurship in the United States? I answer this question by taking advantage of the natural experiment provided by the Affordable Care Act’s dependent coverage mandate, which allowed many 19-25 year olds to acquire health insurance independently of their employment. This mandate provides a means to estimate the number of potential entrepreneurs discouraged by the current system of employer-based health insurance. A difference-in-difference strategy finds that the dependent coverage mandate led to a 13-24% increase in self-employment among the treated group. The effect is found to be larger for womenand for unincorporated businesses. An instrumental variables strategy finds that those actually receiving health insurance coverage as dependents were much more likely to start businesses. [emphasis added]

This post originally appeared on Hunter Walk’s blog. Image credit: Leader Nancy Pelosi via Flickr

About the blogger: Hunter Walk is a partner @Homebrew, a seed stage venture fund serving founders who enable individuals and small biz to think big. Previously he led consumer product management at YouTube and is a founding member of the product and marketing team at Linden Lab.