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Do Work Decisions among Young Adults Respond to Extended Dependent Coverage?

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  • Youjin Hahn
  • Hee-Seung Yang

Abstract

Young adults aged 19 to 29 are significantly less likely than those in other age groups to have health insurance since most family insurance policies cut off dependents when they turn 19 or finish college. Between 2003 and 2009, several U.S. states relaxed their eligibility requirements to allow young adults to remain covered under their parents’ employer-provided health insurance policies. For those who qualify for these benefits, the expansion of dependent coverage partially reduces the value of being employed by a firm that provides health insurance or of working full-time, as adult children can now obtain health insurance through an alternate channel. The authors employ quasi-experimental variation in the timing and generosity of states’ eligibility rules to identify the effect of the policy changes on young adults’ labor market choices. Their results suggest that the expansion increases the group dependent coverage rate and reduces labor supply among young adults, particularly in full-time employment.

Suggested Citation

  • Youjin Hahn & Hee-Seung Yang, 2016. "Do Work Decisions among Young Adults Respond to Extended Dependent Coverage?," ILR Review, Cornell University, ILR School, vol. 69(3), pages 737-771, May.
    • Handle: RePEc:sae:ilrrev:v:69:y:2016:i:3:p:737-771
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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. 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).
    3. 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.
    4. Li, Yajuan & Palma, Marco A. & Towne, Samuel, 2017. "Does Health Insurance Provision Improve Self-Employment and Entrepreneurship? Evidence from State Insurance Mandates," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258399, Agricultural and Applied Economics Association.
    5. Laura J. Owen, 2017. "Part-time Employment and Health Insurance Reform: What Can Massachusetts Tell Us about the Affordable Care Act?," Review of Social Sciences, LAR Center Press, vol. 2(3), pages 1-8, March.
    6. Joelle Abramowitz, 2018. "Planning parenthood: the Affordable Care Act young adult provision and pathways to fertility," Journal of Population Economics, Springer;European Society for Population Economics, vol. 31(4), pages 1097-1123, October.
    7. 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.
    8. Conor Lennon, 2019. "Employer‐Sponsored Health Insurance and the Gender Wage Gap: Evidence from the Employer Mandate," Southern Economic Journal, John Wiley & Sons, vol. 85(3), pages 742-765, January.
    9. Nga Le Thi Quynh & Groot, Wim & Tomini, Sonila M. & Tomini, Florian, 2017. "Effects of health insurance on labour supply: A systematic review," MERIT Working Papers 2017-017, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    10. Joelle Abramowitz, 2017. "Planning Parenthood: The Affordable Care Act Young Adult Provision and Pathways to Fertility," Working Papers 17-65, Center for Economic Studies, U.S. Census Bureau.
    11. Margaret Katherine McKeehan, 2018. "The EITC and the labor supply of adult dependents: direct effects and family income effects," Review of Economics of the Household, Springer, vol. 16(3), pages 791-807, September.
    12. Andrés Hincapié, 2020. "Entrepreneurship Over The Life Cycle: Where Are The Young Entrepreneurs?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 61(2), pages 617-681, May.
    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. Michael R. Richards & Sebastian Tello‐Trillo, 2021. "Private coverage mandates, business cycles, and provider treatment intensity," Health Economics, John Wiley & Sons, Ltd., vol. 30(5), pages 1200-1221, May.
    15. Gamino Aaron M., 2021. "The Effect of Health Insurance on Young Adult HIV Testing: Evidence from the Affordable Care Act Dependent Coverage Mandate," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 21(1), pages 147-174, January.
    16. Zhao, Weimin, 2019. "Does health insurance promote people's consumption? New evidence from China," China Economic Review, Elsevier, vol. 53(C), pages 65-86.
    17. Otto Lenhart & Vinish Shrestha, 2016. "The Effect of the Health Insurance Mandate on Labor Market Activity and Time Allocation: Evidence from the Federal Dependent Coverage Provision," Working Papers 2016-10, Towson University, Department of Economics, revised Apr 2016.
    18. Margaret E. Blume-Kohout, 2024. "Entrepreneurship Lock and the Demand for Health Insurance: Evidence from the US Affordable Care Act," ILR Review, Cornell University, ILR School, vol. 77(2), pages 199-226, March.
    19. Lennon, Conor, 2021. "Are the costs of employer-sponsored health insurance passed on to workers at the individual level?," Economics & Human Biology, Elsevier, vol. 41(C).

    More about this item

    Keywords

    young adults; health insurance; group dependent coverage; labor supply; full-time employment;
    All these keywords.

    JEL classification:

    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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