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The effects of the affordable care act dependent coverage mandate on parents’ labor market outcomes

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  • Kim, Seonghoon
  • Koh, Kanghyock

Abstract

We examine the labor market impacts of the Affordable Care Act dependent mandate (ACA-DM), which has significantly increased dependent children's health insurance coverage through parents’ employer-sponsored health benefits. Using data from the American Community Survey, we find that the ACA-DM reduced parents’ annual wages by about $2,600. However, the probability of employment and working hours only decreased marginally. The back-of-the-envelope calculation indicates that the magnitude of the estimated wage impact is similar to the increased insurance premium of a family plan due to the ACA-DM. These findings imply that a deadweight loss associated with the expansion of dependent health coverage is likely to be small as an increase in employers’ labor costs is offset by a reduction in parents’ wages without significant reductions in labor inputs.

Suggested Citation

  • Kim, Seonghoon & Koh, Kanghyock, 2022. "The effects of the affordable care act dependent coverage mandate on parents’ labor market outcomes," Labour Economics, Elsevier, vol. 75(C).
    • Handle: RePEc:eee:labeco:v:75:y:2022:i:c:s0927537122000215
    DOI: 10.1016/j.labeco.2022.102128
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    Cited by:

    1. Kim, Jinyoung & Kim, Seonghoon & Koh, Kanghyock, 2022. "Labor market institutions and the incidence of payroll taxation," Journal of Public Economics, Elsevier, vol. 209(C).

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    More about this item

    Keywords

    The affordable care act dependent mandate; Dependent health insurance coverage; Parents’ labor market outcomes; Deadweight loss;
    All these keywords.

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health

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