Gender gap in STEM entrepreneurship: Effects of the Affordable Care Act reform

Abstract

Research Summary: This article examines whether the Affordable Care Act (ACA) health insurance reform reduced the gender gap in science, technology, engineering, and mathematics (STEM) entrepreneurship. I argue that the ACA mitigated mobility constraints imposed by employer-provided health insurance and encouraged entrepreneurship with important contingencies: effects were limited to women because of gender differences in supply-side cost reduction and demand-side health insurance needs and were specific to women in STEM (vs. non-STEM) entrepreneurship because of the human and financial capital needed to navigate insurance markets. Leveraging the ACA quasi-experiment, I find consistent evidence of a reduced gender gap in STEM entrepreneurship. Surprisingly, the effects were driven by increased STEM entrepreneurship for married women founding unincorporated businesses. Qualitative interview insights and empirical findings provide explanations for these patterns. Managerial Summary: This study examines whether the science, technology, engineering, and mathematics (STEM) entrepreneurial gender gap can be reduced by institutional factors mitigating labor market mobility constraints imposed by employer-provided work benefits. Through the lens of the US ACA reform, I find that broadened access to more affordable health insurance in the alternative individual insurance markets disproportionately encouraged female (vs. male) STEM (vs. non-STEM) entrepreneurship, thus reducing the STEM entrepreneurial gender gap. Contrary to common assumptions, this effect is driven by married (vs. unmarried) women and is in unincorporated (vs. incorporated) self-employment. The findings help discern which groups benefit from policy efforts to promote diversity in STEM entrepreneurship and imply that the effectiveness of employer-provided work benefits as retention tools is dependent on various worker characteristics.