Children’s Health Insurance and Labor Supply: Evidence from the Affordable Care Act’s Dependent Coverage

• In Event: ACA Insurance Policies

Abstract

This paper examines how health insurance coverage for adult children affects parents’ labor supply near retirement. We treat the Affordable Care Act’s 2010 dependent coverage mandate as a natural experiment. This provision required most private health plans to cover children up to age 26. Using Health and Retirement Study data from 1998–2022, we apply a triple differences approach: we compare the pre- and post-policy behavior of parents with children under 26 to that of parents with children aged 26–29, differentiated by whether the parent had employer-sponsored health insurance at baseline. The mandate substantially increased dependent coverage among its target population: children aged 19–23 who were not in school, as well as children aged 24–25. Moreover, employment increased among parents of children within these newly eligible age groups. These effects were stronger among mothers and parents without retiree coverage.

Authors

• Olzhas Zhorayev, George Mason University
  Presenting Author

• Narae Lee, George Mason University
  Non-Presenting Co-Author

• Sita Nataraj Nataraj Slavov, George Mason University
  Non-Presenting Co-Author