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US - Affordable Care Act won’t cause spike in part-time jobs

August 27 2013

The Affordable Care Act won’t mean a large increase in part-time jobs, according to a report released this week by the Federal Reserve Bank of San Francisco.

“Before the law was passed, most large employers already faced IRS rules that prevented them from denying available health benefits to full-time workers,” according to the report by Rob Valletta and Leila Bengali. “These rules gave employers an incentive to create part-time jobs to avoid rising health benefit costs. Moreover, recent research suggests that the ultimate increase in the incidence of part-time work when the ACA provisions are fully implemented is likely to be small, on the order of a 1 to 2 percentage point increase or less.”

The small increase would be consistent with what was seen in Hawaii, where part-time work increased only slightly in the two decades since that state began its own healthcare mandate, according to the report.

In addition, the report found the level of part-time work right now is not unusually high relative to levels observed in the past. On the other hand, it found the prevalence of part-time work has been rising among younger workers, and part-time work has been rising among some groups of prime-age workers age 25 to 54. Also, incidents of involuntary part-time work have also been on the rise.

“These factors have fueled speculation that elevated rates of part-time work may be here to stay,” according to the report. “However, it is more probable that the continued high incidence of individuals working part time for economic reasons reflects a slow recovery of the jobs lost during the recession rather than permanent changes in the proportion of part-time jobs.”

To read the full report, click here.

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