Is Boston’s Health Care Industry Still Growing? Here’s What the Data Says.

From 1998 to 2018 in Massachusetts, employment in the Health Care and Social Assistance sector grew by 45% and the number of establishments grew by 149%, as seen in Figures 1.a. and 1.b. below. The number of establishments has increased steadily over time with the exception of 2014-2015, while employment growth has fluctuated after the 2008 recession. Generally, year-to-year changes in employment and the number of establishments are positively correlated, with the major exception of the recession in 2008-2010, in which employment in the industry contracted and the number of business establishments grew.

Figure 1.a. The number of employees in the Health Care and Social Assistance industry in Massachusetts over time

Figure 1.b. The number of employers in the Health Care and Social Assistance industry in Massachusetts over time

Between 1998 and 2016, there were 38% more business births than business deaths in the Health Care and Social Assistance industry in Massachusetts (see Figure 2 below). Generally, the level of business turnover has remained a stable percentage of total industry establishments over this period, but the absolute number of firms entering or exiting the market has increased as the industry has grown.

While the number of establishments in this industry generally increased between 1998 and 2016, the industry had a large number of establishments go out of business in 2013 and 2014. This is especially true in Suffolk and Worcester Counties, and the struggles of health care businesses in these areas in 2013 and 2014 may be related to a mini-boom in suburban development as the nation recovered from the 2008 housing crisis. In fact, Nantucket and Dukes Counties saw the largest gains in health care establishments between 2013 and 2018. In 2018, the number of health care establishments in Suffolk County (which includes Boston) remained 10% less than its 2013 peak.

Curiously, the number of new businesses in the Health Care and Social Assistance sector was higher during the Great Recession than in the prior period of economic expansion. This may be attributable to a significant growth in social and health care services targeted at financially struggling families and individuals. In fact, there is another spike in business births in this industry in 2001, also a recession year. A smaller surge in the number of industry births in 2006 notably coincides with a state-level health care reform under Chapter 58 enacted in that year.

The number of business deaths is very stable until 2013. The net business births figure for the industry has proved quite volatile in recent years, with a couple annual swings of over 5,000 net births.

Figure 2: The number of business births and deaths in the Health Care and Social Assistance industry in Massachusetts over time

More information on business trends, whether by industry, geography, or in the aggregate, is available at MassEconomix.com.

Andrew Mikula is the Lovett & Ruth Peters Economic Opportunity Fellow at the Pioneer Institute. Research areas of particular interest to Mr. Mikula include urban issues, affordability, and regulatory structures. Mr. Mikula was previously a Roger Perry Government Transparency Intern at the Institute and studied economics at Bates College.

Study: Graduated Income Tax Proposal Fails to Protect Taxpayers from Bracket Creep

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The state constitutional amendment proposed by the Service Employees International Union and the Massachusetts Teachers Association to add a 4 percent surtax to all annual income above $1 million purports to use cost-of-living-based bracket adjustments as a safeguard that will ensure only millionaires will pay. But historic income growth trends suggest that bracket creep will cause many non-millionaires to be subject to the surtax over time, according to a new study published by Pioneer Institute.

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Pioneer Institute, The Immigrant Learning Center Co-Produce New Weekly Podcast

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Pioneer Institute is pleased to announce the launch of JobMakers, a new weekly podcast that explores the world of risk-taking immigrants who create new products, services, and jobs in New England and across the United States. JobMakers is produced in collaboration with The Immigrant Learning Center (ILC) of Malden, MA.

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April 1, 2021

If passed, a constitutional amendment to impose a graduated income tax would raid the retirement plans of Massachusetts residents by pushing their owners into higher tax brackets on the sales of homes and businesses, according to a new study published by Pioneer Institute. The study, entitled “The Graduated Income Tax Trap: A retirement tax on small business owners,” aims to help the public fully understand the impact of the proposed new tax.

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Study: Graduated Income Tax Proponents Rely on Analyses That Exclude the Vast Majority Of “Millionaires” to Argue Their Case

March 25, 2021

Advocates for a state constitutional amendment that would apply a 4 percent surtax to households with annual earnings of more than $1 million rely heavily on the assumption that these proposed taxes will have little impact on the mobility of high earners. They cite analyses by Cornell University Associate Professor Cristobal Young, which exclude the vast majority of millionaires, according to a new study published by Pioneer Institute.

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Study Finds Massachusetts Graduated Income Tax May Be a “Blank Check” and Not Increase Funding for Designated Priorities

March 10, 2021

Advocates claim a proposed 4 percent surtax on high earners will raise nearly $2 billion per year for education and transportation, but similar tax hikes in other states resulted in highly discretionary rather than targeted spending, according to a new policy brief published by Pioneer Institute. That same result or worse is possible in Massachusetts because during the 2019 constitutional convention state legislators rejected — not just one, but two — proposed amendments requiring that the new revenues be directed to these purposes.

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