ECONOMIC REPORT OF THE PRESIDENT

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Figure 4-17 Monthly Gain in Private-Sector Payroll Employment, 2008–2016 Job Gain/Loss 600,000 400,000 Nov-2016 200,000 0 -200,000 -400,000 Twelve-Month Moving Average -600,000 -800,000 -1,000,000 2008 2010 2012 2014 2016 Source: Bureau of Labor Statistics, Current Employment Statistics; CEA Calculations. that the ACA has not had the extreme negative effects on employment that many critics predicted. However, more rigorous evidence on the ACA’s effects on labor markets can be obtained by comparing labor market performance between states where the ACA’s coverage provisions were likely to have had larger or smaller impacts. One crude indicator of the scope of the effects of the ACA’s coverage provisions is simply the state’s uninsured rate in 2013; consistent with this, it is a strong predictor of the magnitude of a state’s coverage gains since 2013, as demonstrated in Figure 4-8. Comparing states with higher and lower uninsured rates in 2013 can therefore provide insight into the effect of the ACA’s coverage provisions on the labor market. Another useful indicator is whether the state has expanded Medicaid, which provides insight into the labor market effects of Medicaid expansion in particular. Figure 4-18 plots each state’s uninsured rate in 2013 against the change from 2013 to 2015 in the share of working-age individuals who are Reforming the Health Care System | 237
currently employed. 15 Contrary to what would have been expected if the ACA’s coverage provisions had reduced employment, there is essentially no correlation between a state’s uninsured rate in 2013 and its employment gains from 2013 to 2015. Similarly, states that expanded their Medicaid programs actually saw slightly larger employment gains than those that did not expand Medicaid (an increase in the working-age employment-population of 1.5 percentage points in expansion states versus 1.3 percentage points in non-expansion states). Several recent studies using related approaches have similarly found no evidence that the ACA’s coverage provision have reduced employment (Pinkovskiy 2015; Kaestner, Gangopadhyaya, and Fleming 2015; Leung and Mas 2016; Gooptu et al. 2016). There is also no evidence that the ACA has driven the large-scale shift to part-time work predicted by critics of the law. As with overall employment, time series evidence is sufficient to dismiss the strong claims made by many of the ACA’s critics. As illustrated in Figure 4-19, since the ACA became law in March 2010, the number of workers employed full time has increased by 13.0 million, while the number of workers employed part-time has been essentially flat. This was true during the years leading up to the implementation of the ACA’s major coverage provisions in 2014, and it continued to be true thereafter, contrary to claims that the ACA would usher in a major shift to part-time work. More rigorous cross-state comparisons also provide little evidence that implementation of the ACA’s coverage provisions has meaningfully reduced workers’ hours. Figure 4-20 plots each state’s uninsured rate in 2013 against the change in average weekly hours among workers ages 16 to 64. Contrary to what would have been expected if the ACA’s coverage provisions had caused many workers to shift to part-time work or caused firms to curtail hours, there is essentially no correlation between a state’s uninsured rate in 2013 and the change in average hours worked from 2013 to 2015. Similarly, average hours worked has increased by about 0.2 hours per week in both Medicaid expansion and non-expansion states, inconsistent with the view that Medicaid expansion has put substantial downward pressure on worker hours. Outside estimates using a range of methodologies similarly conclude that there is little evidence that the law has driven a major 15 An alternative, simpler approach would be to compare labor market outcomes across states seeing larger and smaller declines in their uninsured rates. Comparisons of this type also support the conclusion that the ACA has not negatively affected the labor market. However, this approach has the disadvantage that improvements in labor market outcomes, whatever their cause, are likely to drive reductions in the uninsured rate since many people who gain jobs gain coverage at work. This could generate a spurious positive relationship between coverage gains and employment gains. The approach taken in Figure 4-18 and Figure 4-20 avoids this problem. 238 | Chapter 4
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ECONOMIC REPORT OF THE PRESIDENT To
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C O N T E N T S ECONOMIC REPORT OF
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economic report of the president To
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eforms in history. Banks have sharp
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the annual report of the council of
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C O N T E N T S CHAPTER 1: EIGHT YE
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. THE ECONOMIC RATIONALE FOR FEDERA
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2.4. Government Purchases as Share
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4.iii. Premium for the Benchmark Pl
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6.18. Systemic Risk (SRISK) 2005-20
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C H A P T E R 1 EIGHT YEARS OF RECO
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Figure 1-1 Actual and Consensus For
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Figure 1-3 Real Hourly Wage Growth
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Figure 1-4 Real GDP per Capita: Eur
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Figure 1-6 Household Net Worth in t
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Figure 1-8 Global Trade Flows in th
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Subsequent revisions to fourth-quar
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Percent 6 Figure 1-9 Fiscal Expansi
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substantial costs to the Federal Go
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worked to promote innovation and in
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expansion, a period of low producti
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The 2017 Economic Report of the Pre
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Chapter 4: Reforming the Health Car
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to the ACA and other factors. The A
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than 98 percent of Americans should
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Figure 1-13 Borrowers in Income Dri
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success of the financial rescue and
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einforced U.S. leadership in the ru
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Partnership (OGP), a global partner
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Figure 1-16 Labor Productivity Grow
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Labor Force Participation Household
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number of steps to ensure that econ
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C H A P T E R 2 THE YEAR IN REVIEW
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Percent 11 Figure 2-1 Unemployment
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allowing for additional investments
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Percentage Point 0.6 0.4 Figure 2-3
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public, largely highway constructio
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The size of the Federal Reserve’s
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Figure 2-5 Private-Sector Payroll E
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fell 80 percent from September 2014
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Figure 2-8 Rates of Part-Time Work,
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Figure 2-v Prime-Age Male Labor For
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Output Real GDP grew 1.6 percent ov
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Figure 2-11 Compensation and Consum
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Table 2-i Optimal Weighting for Hou
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esults suggest that, to a first app
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Figure 2-viii Real GDP, Average and
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Figure 2-13 Consumer Sentiment and
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Figure 2-xi Household Debt Service,
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Ratio to Annual DPI 1.10 1.05 Figur
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Figure 2-17 National House Price In
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Index 220 Figure 2-19 Housing Affor
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Figure 2-21 Composition of Growth i
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Figure 2-23 Capital Services per Un
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Box 2-7: Explanations for the Recen
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Figure 2-xv Business Fixed Investme
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Figure 2-26 Foreign Real GDP and U.
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somewhat generalizable (Box 2-8), b
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prices weakened and the global econ
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inadequate demand has contributed t
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Figure 2-31 Nominal Wage Inflation
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Figure 2-33 Real Hourly Wage Growth
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Index 6 Figure 2-36 Financial Condi
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Percent 4.0 Figure 2-38 Nominal Lon
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Dollars per Barrel 80 Figure 2-40 B
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Figure 2-41 IMF World Real GDP Grow
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against the Mexican peso, the Chine
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United Kingdom It has been a turbul
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for example, Japan has grown almost
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Figure 2-45 Credit to Nonfinancial
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Meanwhile, core inflation (excludin
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kept rates low across a wide range
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Investments in surface transportati
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Table 2-2 Supply-Side Components of
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Conclusion The economy continued to
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not increased from 1973 to 2013, in
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developments; individual behavior;
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action affecting income inequality
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have occurred. In doing so, these p
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Percent 24 21 18 15 12 9 6 African
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without the policy response.5 These
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Box 3-2: Income Inequality and the
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unable to obtain insurance at any p
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Figure 3-7B Percent 50 Uninsured Ra
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and have not expanded Medicaid foun
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Box 3-3: Safety Net Policies as Ins
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Millions of People 18 Figure 3-8 Im
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Figure 3-9 Effective Tax Rates for
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Box 3-4: Additional Actions to Make
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$294 million in newly appropriated
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15 10 5 0 -5 -10 -15 Figure 3-12 Pe
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Administration with those of previo
Page 191 and 192: as a share of potential GDP by Pres
Page 193 and 194: Figure 3-17 Changes in the Distribu
Page 195 and 196: 30 25 20 15 10 5 0 Single Source: C
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Page 200 and 201: C H A P T E R 4 REFORMING THE HEALT
Page 202 and 203: eneficiaries have received cumulati
Page 204 and 205: form of lower premium costs and ind
Page 206 and 207: Percent 25 20 Creation of Medicare
Page 208 and 209: Figure 4-3 Health Insurance Coverag
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Page 212 and 213: Percent Uninsured 25 CHIP Created 2
Page 214 and 215: Legislative actions subsequent to C
Page 216 and 217: Percent Uninsured 40 35 Figure 4-7
Page 218 and 219: ecause of the ACA’s provision all
Page 220 and 221: Box 4-2: Dynamics in the Individual
Page 222 and 223: projected during the debate over th
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Page 226 and 227: Figure 4-v Change in Benchmark Prem
Page 228 and 229: 20 Figure 4-10 Share of Workers in
Page 230 and 231: percent during the decade preceding
Page 232 and 233: Panel A: Share with a Personal Doct
Page 234 and 235: Box 4-3: Interpreting Results from
Page 236 and 237: Fortunately, the OHIE is not the on
Page 238 and 239: Figure 4-14 Uncompensated Care as a
Page 240 and 241: Figure 4-15 Uninsured Rate by Popul
Page 244 and 245: Change in Working-Age Employment to
Page 246 and 247: this cross-sectional relationship b
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Page 250 and 251: Figure 4-23 Life Expectancy at Birt
Page 252 and 253: Figure 4-24 Mortality Rate vs. Medi
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Page 256 and 257: example, through CMMI, the Administ
Page 258 and 259: orient payment around the entirety
Page 260 and 261: Percent of Payments 60 Figure 4-26
Page 262 and 263: covered under ACO contracts at the
Page 264 and 265: Additional Steps to Reform the Heal
Page 266 and 267: legislation that overrides the reco
Page 268 and 269: Figure 4-28 Health Care Price Infla
Page 270 and 271: Figure 4-30 Trends in Real Prices f
Page 272 and 273: average growth rate of real per enr
Page 274 and 275: Figure 4-34 Growth in Real Costs fo
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Page 278 and 279: in states experiencing weaker and s
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Page 284 and 285: Figure 4-40 Average Real Deductible
Page 286 and 287: Figure 4-41 Real Per-Enrollee Presc
Page 288 and 289: educe the growth rate of Medicare s
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-5 0 -2 Figure 4-42 Cumulative Perc
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Woolhandler 2015). These analysts a
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productivity on the job. These bene
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Figure 4-46 Premiums and Cost Shari
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(KFF 2016). Another fifth of tradit
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2030 2028 2026 2024 2022 2020 2018
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C H A P T E R 5 INVESTING IN HIGHER
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Gainful Employment regulations. To
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Thousands of 2015 Dollars 900 800 7
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externalities, credit constraints,
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Figure 5-4 Earnings by Age and Educ
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Figure 5-5 Variation in Earnings by
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Box 5-1: Anti-Poverty Efforts and E
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careers. Some of the effects of the
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eligibility cutoff likewise finds s
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Box 5-2: Federal Investments in K-1
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Evaluations of early local Promise
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America’s College Promise Playboo
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Dollars 45,000 40,000 35,000 30,000
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pre-payment penalty. Second, by tyi
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equirements, pushed efforts associa
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Figure 5-16 Size of Outstanding Loa
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Figure 5-17 Average Monthly Payment
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Figure 5-18 Distribution of Key Out
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Figure 5-20 Earnings by Family Inco
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to student needs and improve test s
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Box 5-5: Making Sure Students Enter
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prior, the early FAFSA reform helps
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Figure 5-ii Number of Institutions
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Figure 5-23 Gainful Employment Earn
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Additionally, Pell Grants can be be
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C H A P T E R 6 STRENGTHENING THE F
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with no easy way to get the funds f
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public has limited information, run
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value added of the sector has gradu
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managers. Thus, after fees, savers
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Too Many Resources in Finance? Beyo
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of the firm after the purchase affe
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Percent 100 Figure 6-2 Mortgage Ori
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Figure 6-4 Case-Shiller Home Price
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Figure 6-7 Global OTC Derivative Ma
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consumer and investor protections.
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Figure 6-iv Top 5 Banks as Share of
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cult to replace with services from
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Are U.S. Banks Too Big? The questio
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The three federal banking agencies
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Risk Taking The Dodd-Frank Act took
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Box 6-3: The Performance of Communi
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Figure 6-ix Return on Assets of Ban
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egulators can take a more holistic
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Figure 6-13 Repo and Reverse Repo,
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Figure 6-15 Private Funds Reporting
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Days 60 Figure 6-16 Weighted-Averag
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Figure 6-18 Systemic Risk (SRISK),
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In the absence of another financial
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lower funding costs in 2007-09, “
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through the Dodd-Frank Act and othe
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Prior to the financial crisis, one
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asis.24 One of the advantages of ce
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findings from the NRSRO examination
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Prior to the crisis, enforcement of
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Box 6-5: Addressing the Problem of
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Table 6-i Sources of Investment Adv
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financial system and the systems of
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Box 6-6: The JOBS Act While it was
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Figure 6-23 S&P 500, 2003-2016 Inde
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Figure 6-27 Mortgage Delinquency an
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It created the FSOC to consider ris
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energy efficient and lower greenhou
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of domestic actions to reduce green
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people and vegetation (U.S. Global
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investment are much higher than the
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Delaying Action on Climate Change I
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uses and land management activities
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Carbon Pollution Standards for Powe
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a projected range of $16 billion to
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these resulted in insignificant cha
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Figure 7-4 Corporate Average Fuel E
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diesel fuel and jet fuel. The Vehic
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Box 7-3: Building Resilience to Cur
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sources in the oil and gas sector,
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emissions and total greenhouse gas
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Figure 7-7 Energy Intensity of Real
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Figure 7-10 U.S. Petroleum Consumpt
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Figure 7-12 Energy Intensity Transp
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Figure 7-14c Energy Intensity Comme
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Figure 7-16 U.S. Energy Consumption
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2008 to 7 percent in 2015. Figure 7
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Index, 2008 =0 0.1 0.0 -0.1 Figure
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Figure 7-23 Decomposition of Emissi
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three determinants of emissions? If
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Percent 100 80 Figure 7-26 Sectoral
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characteristics, and management tre
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oil and gas sector) were subsequent
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while creating new jobs and raising
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such as using similar methodologies
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Box 7-4: Supporting Increased Penet
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sector, the fee would incentivize p
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to be used to decompose emissions i
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Reinvestment Act.” NBER Working P
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D’Amico, Stefania, et al. 2012.
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______. 2016. “Chapter 3: Develop
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Chetty, Raj, et al. 2014. “Where
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NBER Working Paper 22170. Cambridge
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American Hospital Association and H
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Cantor, Joel C., et al. 2012. “Ea
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______. 2012a. “Direct Spending a
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Dranove, David, Craig Garthwaite, a
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Wars: Global Solutions for Developi
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Huang, Jidong, and Frank J. Chaloup
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McWilliams, J. Michael. 2016. “Ch
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Pinkovskiy, Maxim. 2014. “The Imp
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______. 2016. “Certification of M
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Arcidiacono, Peter, V. Joseph Hotz,
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Bulman, George, and Caroline Hoxby.
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______. 2015a. “Economic Costs of
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Dobbie, Will, and Roland G. Fryer J
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Committee on Health, Education, Lab
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Jepsen, Christopher, Kenneth Troske
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Marcotte, Dave E., et al. 2005. “
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Reynolds, Arthur J., et al. 2011.
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Chapter 6 Acharya, Viral. V., Deniz
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Fama, Eugene F., and Kenneth R. Fre
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Wheelock, David C., and Paul W. Wil
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______. 2016a. “The Economics of
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______. 2016c. Short Term Energy Ou
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Interagency Working Group on the So
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Office of Management and Budget (OM
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A P P E N D I X A REPORT TO THE PRE
Page 553 and 554:
Council Members and Their Dates of
Page 556 and 557:
Report to the President on the Acti
Page 558 and 559:
consulting with a wide variety of o
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In October, the Council released a
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Research Economists David Boddy . .
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A P P E N D I X B STATISTICAL TABLE
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GOVERNMENT FINANCE, INTEREST RATES,
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Year or quarter Table B-1. Percent
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Table B-2. Gross domestic product,
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Table B-3. Quantity and price index
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Table B-5. Real exports and imports
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Year Total Table B-7. Real farm inc
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Table B-9. Median money income (in
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Labor Market Indicators Table B-11.
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Year or month Table B-12. Civilian
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Table B-14. Employees on nonagricul
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Year or month Table B-15. Hours and
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Government Finance, Interest Rates,
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Table B-19. Federal receipts and ou
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Table B-21. Federal and State and l
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Table B-23. U.S. Treasury securitie
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Year and month Bills (at auction) 1
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Year and month Table B-26. Money st
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