Dependent Coverage and Parental "Job Lock": Evidence from the Affordable Care Act

Coverage for dependents is a standard feature of employer-sponsored insurance. While prior work shows that employees trade off job mobility for their own coverage, less is known about the intra-family spillovers of dependent coverage on parental labor supply. We study this question using a large panel of employer-based insurance claims that links dependent enrollment to a proxy for parental job retention. We use a regression discontinuity design that exploits a sharp change in the duration of dependent eligibility by birth month under the Affordable Care Act. We find that additional dependent insurance eligibility increases both dependent take-up and parental job retention. This “job lock” effect is strongest among parents more likely to be on the margin of a job exit, for families that place higher value on dependent coverage, and employees of firms offering a broader range of insurance options.