Skip to main content

Employer-sponsored health insurance and the gender wage gap: Evidence from the employer mandate (Lennon, 2019)

Absence of conflict of interest.

Citation

Lennon, C. (2019). Employer-sponsored health insurance and the gender wage gap: Evidence from the employer mandate. Southern Economic Journal, 85(3), 742-765.

Highlights

  • The study's objective was to examine the impact of the Affordable Care Act’s employer mandate on hourly wages by gender.  

  • The study used a difference-in-differences design to estimate how the wage gap by gender changed after the mandate was announced for employees at businesses that would be affected by the mandate. The study used data from the household component of the 2006–2014 Medical Expenditure Panel Survey (MEPS), which collects data on wages, employment status, and employer size. The authors used a statistical model to compare the wages of male and female employees before and after the employer mandate was announced.    

  • The study found that the gender gap in wages was not statistically different after the introduction of the Affordable Care Act’s employer mandate, controlling for individuals’ medical expenditures.  

  • The quality of causal evidence presented in this report is moderate. This means we can be somewhat confident that any estimated effects would be attributable to the employer mandate, and not to other factors. However, the study did not find statistically significant effects. 

Intervention Examined

Affordable Care Act (2010)

Features of the Intervention

The Affordable Care Act (ACA) mandated that firms with more than 50 full-time employees offer employer-sponsored health insurance starting in 2014. This study examines anticipatory effects for the mandate by focusing on behavior from 2010, once employers were aware of the mandate, through 2014. The study uses this legislation to determine if offering employer-sponsored insurance affects wages.    

Features of the Study

The study used a difference-in-differences design to examine how the wage gap by gender changed after the ACA’s employer mandate was announced for employees at firms that would be affected by the mandate. The study used a sample of 2,722 people who participated in the 2006–2014 Medical Expenditure Panel Survey (MEPS) and who worked at firms that had at least 50 full-time employees but did not previously offer employer-sponsored health insurance, and thus would be affected by the mandate. The study excluded those under the age of 27 because they might have been affected by the ACA’s dependent coverage mandate and those over the age of 60 because they would be close to retirement age by the time the employer mandate went into effect. The treatment group is men employed at firms affected by the employer mandate. The comparison group is women employed at firms affected by the employer mandate. The author used a statistical model to compare the wages of male and female employees before and after the mandate was announced. The model includes typical demographic controls like age, race, education, and industry. 

Findings

Earnings and wages

  • The study found that the gender gap in hourly wages at firms affected by the ACA’s employer mandate did not change significantly after the mandate was announced, controlling for individual medical expenditures and other factors. 

Causal Evidence Rating

The quality of causal evidence presented in this report is moderate because it was based on a well-implemented nonexperimental design. This means we would be somewhat confident that any estimated effects are attributable to the intervention, and not to other factors. However, the study did not find statistically significant effects. 

Reviewed by CLEAR

April 2022