There's a growing number of studies suggesting that the Affordable Care Act (a.k.a. Obamacare) is going to increase entrepreneurship and self-employment.
The New York Times article The Affordable Care Act Could be Good for Entrepreneurship covers a Robert Woods Johnson study that finds Obamacare will likely increase the number of self-employed by more than 11% as a direct result of the law.
This study adds to a recent report by the Kauffman-RAND Institute for Entrepreneurship and Public Policy saying the law could increase the number of new U.S. businesses by as much as 33% over several years.
The reasons these studies say self-employment and small business formation will increase is due to the reduction in job lock. This is the term economists use to describe the reluctance of workers to leave their jobs because doing so would mean losing fringe benefits, especially health insurance.
Obamacare allows individuals going out on their own to get health insurance through mandated state or federally run insurance marketplaces. This means, at least in theory, the end of health insurance related job lock.
Before you send hate mail - yes, the jury is still out whether or not Obamacare's overall economic and societal impacts will be positive or negative. And yes, we've seen the articles on Obamacare increasing the costs of individual insurance rates in California.
But despite these issues, we're mostly in agreement with these studies. While we think they overstate the impact of job lock - and overstate how many new businesses will result - we think Obamacare will lead to more people being self-employed.