Duke - The Fuqua School of Business

News Release

Obamacare’s Impact on Hiring ‘More Serious,’ Say Two Business Professors

CFO Survey Reveals Further Impact On Hiring From Obamacare

February 05, 2014

A Congressional Budget Office analysis released Tuesday predicted the Affordable Care Act would shrink the work force by the equivalent of more than 2 million full-time positions. The latest Duke-CFO Survey, conducted in December 2013, asked chief financial officers about the impact of the ACA on their future hiring. The survey found, among other things, a reluctance to hire full-time employees (nearly half of CFOs surveyed), a shift toward part-time workers (more than 40 percent) and a reduction in health benefits (44 percent).

Campbell Harvey, J. Paul Sticht Professor in International Business, Duke University’s Fuqua School of Business
(919) 660-7768; cam.harvey@duke.edu
Specializes in financial markets, global risk management, portfolio management; has been a visiting scholar at the Board of Governors of the Federal Reserve System. Founding director of The Duke-CFO Survey.

“The Congressional Budget Office released a report yesterday warning of job losses because 2 million people ‘will choose to supply less labor.’ (CBO, p. 177). Our survey shows that the situation is much more serious because employers tell us that they will choose not to hire and may lay people off.”
“I doubt the advocates of this legislation anticipated the negative impact on employment. The impact on the real economy is astonishing. Nearly one-third of firms may either terminate employees or hire fewer people in the future as a direct result of ACA. Yesterday’s CBO report got some attention -- but it significantly understates the legislation’s impact.”

John Graham, D. Richard Mead Jr. Family Professor of Finance, Duke University’s Fuqua School of Business
(919) 660-7857; john.graham@duke.edu.
Specializes in corporate finance; taxation; investments; combining and assessing forecasts. He is director of The Duke-CFO Survey.

“The inadequacies of the ACA website initially grabbed a lot of attention, even though many of those issues have been fixed. Our survey points to a more detrimental and potentially long-lasting problem. An unintended consequence of the Affordable Care Act will be a reduction in full-time employment growth in the United States. Companies plan to increase full-time employment by 1.4 percent in 2014, a rate of growth which is down from last quarter and unlikely to put a dent in the unemployment rate, assuming that the labor force participation rate remains constant. CFOs indicate that full-time employment growth would be stronger in the absence of the ACA.”