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Obamacare is not only hurting small businesses and economic growth. It might also give nearly a million low-income individuals a reason to leave work for welfare.
A new study from the National Bureau of Economic Research by professors from Columbia University, Northwestern University, and the University of Chicago argues that, as a result of Obamacare, between half a million and 900,000 Americans may leave the workforce and receive welfare. The bill grants free or heavily subsidized public health insurance to hundreds of thousands of working Americans who are not currently eligible.
Americans who currently remain employed in order to receive health insurance may decide to leave the workforce when insurance is provided to them by Obamacare. According to the report, this would cause a decline in the aggregate employment rate of 0.3–0.6 percentage points, posing significant harm to a still-recovering economy.
This growth in the welfare state would represent just another step the Administration has taken toward encouraging dependence. As Heritage experts Robert Rector and Katherine Bradley note, “Government should encourage constructive behaviors leading to self-reliance and prosperity rather than rewarding counterproductive behaviors leading to costly dependence and poverty.”
Under the Obama Administration, welfare spending has hit an all-time high, costing taxpayers nearly $1 trillion annually. Nearly one-third of the U.S. population currently receives some type of welfare assistance from the federal government.
Last July, the Administration illegally declared that states could receive an exemption from Temporary Assistance to Needy Families work requirements, gutting the successful 1996 welfare reform. A provision in the 2009 stimulus package that temporarily waived work requirements for able-bodied food stamp recipients still stands.
Instead of imposing disincentives to self-sufficiency, lawmakers should reform welfare to promote personal responsibility through work.
Riley Westmoreland is currently a member of the Young Leaders Program at The Heritage Foundation. For more information on interning at Heritage, please click here.
