The relative influence of inter-generational co-residence on healthcare market and labour market outcomes in post-Affordable Care Act USA

This paper investigates the effects of inter-generational co-residence on healthcare market, and labour market outcomes in post-Affordable-Care Act (ACA) USA. The analytical strategy involves not only looking at the gender differences in co-residence, but also accounting for co-residence endogeneity using a switching regression approach. This novel approach on the topic defines co-residence as an endogenous selection process using a binary probit equation, and modelled jointly with the extensive margins and intensive margins in the two markets, and estimated using penalised maximum likelihood methods. The results show that co-residence increases healthcare expenditure by 56.7% among females, while this figure increases to 74.2% among males. In addition, co-residing individuals, while having a 69.7% higher annual family healthcare expenditure are 1.22 times more likely to access healthcare, but 31% less likely to use healthcare intensively during the year. In the labour market, co-residence is found to reduce significantly hours of weekly labour supplied by 41% for females, and 55.6% for males. Furthermore, co-residing individuals, while not significantly different in their likelihood of labour force participation, are 1.52 times less likely to work full time once they decide to participate, and also spend about 55.4% less time working in the labour market in post-ACA USA.