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Do more health insurance options lead to higher wages? Evidence from states extending dependent coverage

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  • Dillender, Marcus

Abstract

Little is known about how health insurance affects labor market decisions for young adults. This is despite the fact that expanding coverage for people in their early 20s is an important component of the Affordable Care Act. This paper studies how having an outside source of health insurance affects wages by using variation in health insurance access that comes from states extending dependent coverage to young adults. Using American Community Survey and Census data, I find evidence that extending health insurance to young adults raises their wages. The increases in wages can be explained by increases in human capital and the increased flexibility in the labor market that comes from people no longer having to rely on their own employers for health insurance. The estimates from this paper suggest the Affordable Care Act will lead to wage increases for young adults.

Suggested Citation

  • Dillender, Marcus, 2014. "Do more health insurance options lead to higher wages? Evidence from states extending dependent coverage," Journal of Health Economics, Elsevier, vol. 36(C), pages 84-97.
    • Handle: RePEc:eee:jhecon:v:36:y:2014:i:c:p:84-97
    DOI: 10.1016/j.jhealeco.2014.03.012
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    Cited by:

    1. Bradley Heim & Ithai Lurie & Kosali Simon, 2018. "Did the Affordable Care Act Young Adult Provision Affect Labor Market Outcomes? Analysis Using Tax Data," ILR Review, Cornell University, ILR School, vol. 71(5), pages 1154-1178, October.
    2. Scott Barkowski & Joanne Song McLaughlin & Alex Ray, 2020. "A Reevaluation of the Effects of State and ACA Dependent Coverage Mandates on Health Insurance Coverage," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 39(3), pages 629-663, June.
    3. Gopi Shah Goda & Monica Farid & Jay Bhattacharya, 2016. "The Incidence of Mandated Health Insurance: Evidence from the Affordable Care Act Dependent Care Mandate," NBER Working Papers 21846, National Bureau of Economic Research, Inc.
    4. James Bailey, 2017. "Health insurance and the supply of entrepreneurs: new evidence from the affordable care act," Small Business Economics, Springer, vol. 49(3), pages 627-646, October.
    5. Fone, Zachary S. & Friedson, Andrew I. & Lipton, Brandy & Sabia, Joseph J., 2020. "The Dependent Coverage Mandate Took a Bite Out of Crime," IZA Discussion Papers 12968, Institute of Labor Economics (IZA).
    6. Dan M. Shane & David M. Zimmer, 2017. "Is the ACA bringing the family back together (for tax purposes)? Investigating the dependent coverage mandate effect on dependent tax exemptions," Review of Economics of the Household, Springer, vol. 15(4), pages 1159-1176, December.
    7. Barış K. Yörük & Linna Xu, 2019. "Impact of the ACA’s Dependent Coverage Mandate on Health Insurance and Labor Market Outcomes Among Young Adults: Evidence from Regression Discontinuity Design," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 45(1), pages 58-86, January.
    8. Scott Barkowski & Joanne Song McLaughlin, 2022. "In Sickness and in Health: Interaction Effects of State and Federal Health Insurance Coverage Mandates on Marriage of Young Adults," Journal of Human Resources, University of Wisconsin Press, vol. 57(2), pages 637-688.
    9. Depew, Briggs, 2015. "The effect of state dependent mandate laws on the labor supply decisions of young adults," Journal of Health Economics, Elsevier, vol. 39(C), pages 123-134.
    10. Maclean, Johanna Catherine & Webber, Douglas, 2022. "Government regulation and wages: Evidence from continuing coverage mandates," Labour Economics, Elsevier, vol. 78(C).
    11. Bradley Heim & Ithai Lurie & Kosali Simon, 2015. "The Impact of the Affordable Care Act Young Adult Provision on Labor Market Outcomes: Evidence from Tax Data," Tax Policy and the Economy, University of Chicago Press, vol. 29(1), pages 133-157.
    12. Lijian Qin & Chien-Ping Chen & Xun Liu & Chenggang Wang & Zhongyi Jiang, 2015. "Health Status and Earnings of Migrant Workers from Rural China," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 23(2), pages 84-99, March.
    13. Serakos Maria & Wolfe Barbara, 2016. "The ACA: Impacts on Health, Access, and Employment," Forum for Health Economics & Policy, De Gruyter, vol. 19(2), pages 201-259, December.
    14. Dillender, Marcus, 2015. "The effect of health insurance on workers’ compensation filing: Evidence from the affordable care act's age-based threshold for dependent coverage," Journal of Health Economics, Elsevier, vol. 43(C), pages 204-228.
    15. Alberto Ortega, 2023. "Medicaid Expansion and mental health treatment: Evidence from the Affordable Care Act," Health Economics, John Wiley & Sons, Ltd., vol. 32(4), pages 755-806, April.
    16. Xiang Kang & Mingxi Du & Siqin Wang & Haifeng Du, 2022. "Exploring the Effect of Health on Migrants’ Social Integration in China," IJERPH, MDPI, vol. 19(8), pages 1-20, April.
    17. Michael Levere & Heinrich Hock & Nancy Early, 2021. "How does losing health insurance affect disability claims? Evidence from the Affordable Care Act's dependent care mandate," Health Economics, John Wiley & Sons, Ltd., vol. 30(5), pages 932-950, May.
    18. Daeho Kim, 2022. "The Effect of the Affordable Care Act Dependent Coverage Mandate on Health Insurance and Labor Supply: Evidence from Alternative Research Designs," ILR Review, Cornell University, ILR School, vol. 75(3), pages 769-793, May.
    19. Jeffrey T. Denning, 2019. "Born under a Lucky Star: Financial Aid, College Completion, Labor Supply, and Credit Constraints," Journal of Human Resources, University of Wisconsin Press, vol. 54(3), pages 760-784.
    20. repec:mrr:papers:wp341 is not listed on IDEAS
    21. Michael Levere & Heinrich Hock & Nancy Early, "undated". "How Does Losing Health Insurance Affect Disability Claims? Evidence from the Affordable Care Act’s Dependent Care Mandate," Mathematica Policy Research Reports a06bcb7b194241b5a2f1c6713, Mathematica Policy Research.

    More about this item

    Keywords

    Health insurance; Dependent coverage; Wages; Education;
    All these keywords.

    JEL classification:

    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private

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