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The Effects of the Affordable Care Act Dependent Coverage Mandate on Parents' Labor Market Outcomes

Author

Listed:
  • Kim, Seonghoon

    (Singapore Management University)

  • Koh, Kanghyock

    (Korea University)

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, 2021. "The Effects of the Affordable Care Act Dependent Coverage Mandate on Parents' Labor Market Outcomes," IZA Discussion Papers 14089, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp14089
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    References listed on IDEAS

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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).
    2. Seonghoon Kim & Kanghyock Koh, 2022. "Health insurance and subjective well‐being: Evidence from two healthcare reforms in the United States," Health Economics, John Wiley & Sons, Ltd., vol. 31(1), pages 233-249, January.

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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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