Did the Affordable Care Act Young Adult Provision Affect Labor Market Outcomes? Analysis Using Tax Data

Abstract

Using a data set of US tax records spanning 2008 to 2013, the authors study the impact of the Affordable Care Act (ACA) young adult dependent coverage requirement on labor market–related outcomes, including measures of employment status, job characteristics, and postsecondary education. They find that the ACA provision did not result in substantial changes in labor market outcomes. Results show that employment and self-employment are not statistically significantly affected. Although some evidence supports the increased likelihood of young adults earning lower wages, not receiving fringe benefits, enrolling as full-time or graduate students, and young men being self-employed, the magnitudes imply extremely small impacts on these outcomes in absolute terms and when compared to other estimates in the literature. The authors find these results to be consistent with health insurance being less salient to young adults, compared to other populations, when making labor market decisions.