THE EFFECT OF THE AFFORDABLE CARE ACT

DEPENDENT COVERAGE MANDATE ON HEALTH

INSURANCE AND LABOR SUPPLY: EVIDENCE
FROM ALTERNATIVE RESEARCH DESIGNS
DAEHO KIM*

This article examines the effect of the Affordable Care Act (ACA)
dependent coverage mandate on health insurance and labor sup-
ply. The author applies three research designs—difference-in-
differences, regression discontinuity, and regression kink designs—
and conducts extensive robustness checks and falsification tests,
along with a formal test for the location of discontinuity and kink.
The author finds no discernible evidence of the labor supply impact
of the ACA dependent coverage mandate during the first three
years after its implementation (2011–2013), despite its substantial
impact on health insurance coverage for the eligible young adults.
The author attributes this finding to the fact that until 2014,
grandfathered plans were not required to provide dependent cover-
age to those young adult workers who obtained insurance through
their own employer.

A pproximately two-thirds of non-elderly Americans obtain health insurance

through their employer, that is, employer-sponsored health insurance
(ESI).1 For example, in 2007, about 62% of the non-elderly under age 65
1
ESI coverage includes ESI as an employee (i.e., own-name ESI), ESI as a dependent child, and ESI as
a spouse.

*DAEHO KIM ( https://orcid.org/0000-0002-7732-6944) is an Assistant Professor in the Department of

Health Services, Policy, and Practice at Brown University.
I thank Anna Aizer, Donald Andrews, David Blau, Audra Bowlus, Kenneth Chay, Christian Dustmann,
Christine Eibner, Audrey Light, Byoung Hoon Seok, Jesse Shapiro, and seminar participants at the 2016
PAA annual meeting for their valuable comments. Feng-An Yang provided excellent research assistance.
I also thank Patricia Barnes at the Research Data Center (RDC), National Center for Health Statistics for
help with the restricted National Health Interview Survey (NHIS) Data. An Online Appendix is available
at http://journals.sagepub.com/doi/suppl/10.1177/0019793920984413. One of the data sets used in the
article, the restricted National Health Interview Survey (NHIS), was analyzed through the National
Center for Health Statistics (NCHS) Research Data Center. Researchers who wish to replicate the results
using the original data can contact the NCHS Research Data Center directly to request the data. All
other data files and the program codes used to create the final results are available from the author at
Daeho_kim@brown.edu.

KEYWORDs: Affordable Care Act, employer-sponsored insurance, dependent coverage mandate, labor sup-
ply, young adults

ILR Review, 75(3), May 2022, pp. 769–793

DOI: 10.1177/0019793920984413. Ó The Author(s) 2021
Journal website: journals.sagepub.com/home/ilr
Article reuse guidelines: sagepub.com/journals-permissions
770 ILR REVIEW

obtained their insurance through ESI (Cohen, Makuc, and Bilheimer 2009).
This percentage implies that health insurance coverage is tightly linked to
employment status. As a result, some workers may remain in their current jobs
with health insurance mainly because of the fear of loss of insurance. Had
there been alternative sources of health insurance not tied to their employ-
ment status, they may have moved to jobs that better match their skills or job
preferences, even if health insurance was not provided at those jobs; or they
may not have worked at all. These phenomena have been described as 1)
‘‘job-lock,’’ focusing on job mobility (Gruber and Madrian 1993; Madrian
1994), and 2) ‘‘employment-lock,’’ focusing on the decision to work at all
(Garthwaite, Gross, and Notowidigdo 2014 among others). Therefore, the pro-
vision of health insurance untied to employment status is likely to affect labor
supply, especially for those who maintain their employment in order to secure
health insurance coverage.
This article examines the effect of the Affordable Care Act (ACA) depen-
dent coverage mandate on health insurance and labor supply of young
adults. The ACA dependent coverage mandate, implemented in 2010,
allows young adults to stay on their parents’ ESI as a dependent child (dependent-
child ESI hereafter) until they turn age 26. Prior to the ACA dependent cov-
erage mandate, young adults lose their dependent-child ESI when they turn
age 19, or at 23 if they are full-time students (Cantor, Monheit, DeLia, and
Lloyd 2012). This rule implies that many young adults have to work in
order to obtain health insurance (their own-name ESI as employees) unless
they have another source of health insurance (e.g., public insurance).
Therefore, the ACA dependent coverage mandate is likely to affect the
labor supply of young adults aged 19 to 25 as it provides them with health
insurance untied to their employment status. For example, young adults
who decide not to work can still obtain health insurance through their
parents’ ESI, instead of their own-name ESI.
To examine the impact of the ACA dependent coverage mandate, I apply
three distinct research designs—difference-in-differences (DD), regression
discontinuity (RD), and regression kink (RK) designs—with extensive
robustness checks including the use of different functional forms,
bandwidths, and kernel weights in RD and RK analyses. In addition, I con-
duct a formal test for the location of a discontinuity (in RD design) and a
kink (in RK design) in the spirit of Hansen (1999, 2000). Furthermore, I
perform a power analysis for the RD approach.
In DD analyses, I first test the parallel trends assumption of a DD approach.
I then account for differential pre-trends between the treatment and control
groups, if detected. In addition, I conduct various robustness checks including
the use of narrow age groups (aged 24–25 compared to 27–28).
As an alternative approach to the DD method, I apply an RD design
exploiting the age discontinuity in eligibility for the ACA dependent cover-
age mandate at the age of 25-and-3-quarters. I use the post-ACA data
(2011–2013) in the main analysis and the pre-ACA data (2008–2009) as a
 AFFORDABLE CARE ACT DEPENDENT COVERAGE MANDATE 771

falsification check. I then examine a discontinuity in changes in labor supply

from 2008–2009 to 2011–2013 (pre-post RD) to net out a possible placebo
effect. I also perform a subgroup analysis by gender. In all analyses, I con-
duct extensive robustness checks that include a variety of local polynomials,
bandwidths, and kernel weights.
In addition, I conduct a formal test for the location of a discontinuity in
the spirit of Hansen (1999, 2000) to assess whether a discontinuity occurs at
the age of 25-and-3-quarters, but not elsewhere. I then perform a power
analysis for the RD approach to assess whether the study sample (individuals
aged 19–32 in the 2011–2013 National Health Interview Survey) provides
enough statistical power to detect a labor supply impact of the ACA depen-
dent coverage mandate.
Note that even if there is no discontinuity at the age of 25-and-3-quarters,
it does not necessarily lead to the conclusion of no impact of the ACA
dependent coverage mandate on labor supply. If young adults are forward-
looking in their option value of being covered by dependent-child ESI, their
labor supply responses would be gradual as their age approaches 26 (i.e.,
kinked slope), rather than abrupt at age 26 (i.e., discontinuous level shift).
Accordingly, I apply a regression kink (RK) design to examine a kink in
changes in labor supply from 2008–2009 to 2011–2013 (pre-post RK). I also
conduct the Hansen test for the location of a kink.

Background and Related Literature

The Patient Protection and Affordable Care Act (ACA) of 2010 (P.L. 111-
148, P.L. 111-152), enacted on March 23, 2010, allows young adults to stay
on their parents’ ESI as a dependent child until their 26th birthday from
the start of plan years beginning on or after September 23, 2010 (Federal
Register 2010). For example, if a child turns 26 on July 17, 2011, then the
last day of coverage is July 16, 2011. Accordingly, I define young adults as
dependent children who have not attained age 26—those aged 25 or youn-
ger (or those aged 25-and-3-quarters or younger when ages are measured in
quarters). While many insurance companies agreed to start providing
dependent coverage earlier than September 23, 2010, an actual increase in
dependent-child ESI appeared to occur starting from 2011 as most health
insurance plans start or renew on January 1st. Therefore, I consider 2011
onward as the post-ACA period.2
Among those young adults aged 19 to 25, some individuals may not qual-
ify for the ACA dependent coverage mandate as health insurance plans are
not required to offer dependent-child ESI to the spouse of an eligible child
or to the child of a child receiving dependent coverage. Note that
grandfathered plans existing as of March 23, 2010, were not required until

2
For DD analyses, I consider years up to 2010 as the pre-ACA period. The results do not change when
using years up to 2009 as the pre-ACA period. For RD and RK analyses, I use 2008 to 2009 as the pre-
ACA period.
772 ILR REVIEW

2014 to offer dependent-child ESI to young adults who were offered ESI
from their own employer (own-name ESI). Young adults who had their
own-name ESI were ineligible for the ACA dependent coverage mandate
(unless grandfathered plans voluntarily covered them). Therefore, a young
adult with own-name ESI cannot keep the same job while switching the
insurance type from own-name ESI to dependent-child ESI (again, unless
grandfathered plans voluntarily provide dependent-child ESI).
Prior to the ACA dependent coverage mandate, many private health insur-
ance plans covered young adults as dependent children of policyholders
until age 19, or to age 23 if young adults were full-time students (Cantor,
Monheit, et al. 2012). Therefore, the insurance coverage of young adults
aged 19 to 25 is expected to increase after the implementation of the ACA
dependent coverage mandate, which means implementation is likely to affect
the labor supply of young adults aged 19 to 25 as it provides them with
health insurance (dependent-child ESI) untied to their employment status.
For example, some young adults with their own-name ESI may decide not to
work (hence losing their own-name ESI) because they can obtain health
insurance through their parents’ ESI (dependent-child ESI).
Prior to the ACA dependent coverage mandate, some states implemented
their own dependent coverage mandates (Levine, McKnight, and Heep
2011; Monheit, Cantor, DeLia, and Belloff 2011; Cantor, Belloff, et al.
2012).3 Recent studies show that the states’ own dependent coverage
mandates affected the labor market outcomes of young adults (Dillender
2014; Depew 2015). Therefore, young adults in states with their own
mandates might be less affected by the ACA dependent coverage mandate.
Given this possibility, I examine the labor supply impact of the ACA depen-
dent coverage mandate separately for states with and without their own
mandates prior to the ACA.
Most empirical studies on the labor market impact of the ACA depen-
dent coverage mandate use a difference-in-differences (DD) approach, uti-
lizing the fact that young adults aged 19 to 25 are eligible for the
dependent coverage mandate (treatment group), whereas those older than
25 are not (control group). Heim, Lurie, and Simon (2015) and Slusky
(2017) found no labor supply effect of the ACA dependent coverage man-
date once they accounted for differential pre-trends between the treatment
and control groups.4 By contrast, Antwi, Moriya, and Simon (2013) found a
decrease in labor supply without accounting for differential pre-trends.5

3
Before 2010, 29 states implemented their own dependent coverage mandates: CO, CT, DE, GA, IA,
ID, IL, IN, KY, MA, MD, ME, MN, MO, MT, ND, NH, NJ, NM, NY, OR, PA, RI, SD, TX, UT, VA, WA, and
WV.
4
Heim, Lurie, and Simon (2015) used a difference-in-differences-in-differences (DDD) approach as
well, exploiting the fact that the ACA dependent coverage mandate affected only those young adults
whose parents have ESI.
5
They account for differential pre-trends for insurance coverage outcomes, but not for labor market
outcomes.
 AFFORDABLE CARE ACT DEPENDENT COVERAGE MANDATE 773

This disagreement highlights the importance of assessing the parallel trends

assumption of a DD approach and accounting for differential pre-trends
when the assumption is violated.
Notable exceptions to the studies that use a DD approach are Dahlen
(2015) and Yörük and Xu (2019), who applied a regression discontinuity
(RD) design by comparing young adults slightly younger than 26 to those
slightly older. Applying a quadratic specification, Dahlen (2015) found an
increase in employment at age 26 among unmarried men.6 However, the
result appears sensitive to the functional form specification. Yörük and Xu
(2019) also found an employment effect when applying a quadratic specifi-
cation, but not for a linear specification. Their nonparametric estimates are
sensitive to the choice of bandwidth and kernel, which illustrates that it is
imperative to assess the robustness of RD estimates to different functional
forms, bandwidths, and kernel weights.

Data
I use the National Health Interview Survey (NHIS) from 2004 to 2013 to
estimate the effect of the ACA dependent coverage mandate on health
insurance and labor supply. The NHIS is an annual household interview
survey with samples of approximately 90,000 individuals from the civilian,
non-institutionalized population of the United States. The NHIS data con-
sist of representative samples of both households and noninstitutional
group housing (e.g., college dormitories), and thus young adults who live in
a household (e.g., parents’ house or their own) as well as those who live out
of a household (e.g., college dormitories) are included in the sample with a
probability proportional to the population size in each group. The NHIS
contains detailed information on health insurance coverage by payers
(private, Medicaid, Medicare, and other public), by sources of private insur-
ance coverage (e.g., through employer or directly purchased), and by
policyholders (e.g., survey respondent or someone else in the family). It also
contains information on family interrelationships within a household. Using
this information, I construct a key variable on insurance coverage, that is,
dependent-child ESI coverage. For example, if a survey respondent has pri-
vate insurance obtained through an employer but the policy is under some-
one else’s name (and a spouse does not have own-name ESI), then I
consider the respondent as being covered by dependent-child ESI.
Although other data sets (e.g., Current Population Survey [CPS]) also
provide information on insurance coverage, one of the advantages of the
NHIS is that it provides concurrent information on insurance coverage at
the time of interview instead of, for example, during the 12 months preced-
ing the interview as in the CPS. This approach helps identify the exact

6
Dahlen (2015) found no change in insurance coverage for those unmarried men, which makes it dif-
ficult to understand a mechanism through which the dependent coverage mandate affects the labor sup-
ply of unmarried men.
774 ILR REVIEW

timing of dependent-child ESI coverage (and the exact age at which a

young adult gains dependent-child ESI) under the ACA dependent cover-
age mandate, which is the main identification variation used in this article.
For regression discontinuity and regression kink analyses, I calculate
individual’s age in quarters of years using information on the survey month
and the month of birth.
In addition, the NHIS provides information on labor market activities for
respondents aged 18 and older. I define a survey respondent as being
employed if the respondent’s activity during the week before the survey is
1) working for pay at a job or business, 2) with a job or business but not at
work, or 3) working, but not for pay, at a family-owned job or business. I
also use the survey question on hours of work during the week before the
survey. Furthermore, to examine potential heterogeneous effects, if any, of
the ACA dependent coverage mandate across states depending on each
state’s own mandate status prior to the ACA, I use restricted-access state
identifiers through the Research Data Center at the National Center for
Health Statistics. State identifiers are also used to cluster the standard errors
at the state level in difference-in-differences analyses.
Finally, in order to ensure that the findings on the labor market impact
of the ACA dependent coverage mandate are not driven by a specific data
set (i.e., NHIS), I redo the DD analyses using the CPS data.

Empirical Strategy
Difference-in-Differences Approach
To identify the effects of the ACA dependent coverage mandate, I use a
difference-in-differences (DD) approach by estimating the following
regression:
0
ð1Þ Yiast = a + ga + ls + dt + u  Younga 3 Postt + X iast b + Uiast

where Yiast is the outcome variable for individual i of age a in state s in year
t; ga are age fixed effects; ls are state fixed effects; dt are year fixed effects;
Younga is an indicator for young adults aged 19 to 25; Postt is an indicator
for the post-ACA period (2011–2013); Xiast is a vector of covariates; and Uiast
is an unobserved term. The parameter of interest is u, which measures the
difference in the outcome variable between those aged 19 to 25 (treatment
group) and those aged 26 to 32 (control group) after the implementation
of the ACA dependent coverage mandate relative to before. Standard errors
are corrected for heteroskedasticity and clustered at the state level to
account for potential serial correlation within states over time.
The key identification assumption of a DD approach is the parallel trends
assumption, meaning the outcome trends of the treatment and control
groups should be parallel over time in the absence of the treatment (i.e.,
prior to the ACA dependent coverage mandate). I test the parallel trends
assumption by first estimating a ‘‘placebo effect’’ using an indicator for a
 AFFORDABLE CARE ACT DEPENDENT COVERAGE MANDATE 775

pseudo-ACA period (2008–2009) and its interaction with the young-adult

indicator, based only on the pre-ACA data (2004–2009); and second, estimat-
ing differential pre-trends in outcomes between the treatment and control
groups using a linear trend and its interaction with the young-adult indicator,
again based only on the pre-ACA data. I then account for differential pre-
trends when estimating the DD regression in Equation (1) by including a lin-
ear time trend and its interaction with the young-adult indicator.
In the DD framework, when a treatment effect changes over time (e.g., a
change in the trend of outcomes), it may be problematic to include differential
time trends between the treatment and control groups as a control for differ-
ential pre-trends because it could absorb the time-varying treatment effect and
thus underestimate the treatment effect (Wolfers 2006; Meer and West 2016).
To address both nonparallel pre-trends and differential treatment effect,
therefore, I apply an event-study specification, which is a simplified version of
the specification suggested by Meer and West (2016) (see Online Appendix
A; hereafter, all mentions of an appendix refer to the online material).

Regression Discontinuity Design

If the parallel trends assumption is violated, then the DD estimators
described in the previous section would be biased. (I present empirical evi-
dence of a violation of the parallel trends assumption in the Results sec-
tion.) As an alternative approach, I apply a regression discontinuity (RD)
design exploiting the age discontinuity in eligibility for the ACA dependent
coverage mandate and compare the labor supply of young adults who are
slightly younger than 26 to those slightly older than 26. Since I use ages
measured in quarters, the age threshold of the eligibility for the ACA
dependent mandate is 25-and-3-quarters, that is, young adults aged 25-and-
3-quarters and younger are the treatment group and those aged 26-and-0-
quarter and older are the control group.
Specifically, I estimate the following RD regression:

ð2Þ Yit ¼ a0 + f ðAgeit  c Þ + u  1fAgeit  c g + f ðAgeit  c Þ  1fAgeit  c g + Uit

where Yit is the outcome variable; f() is an underlying functional relation

between the outcome and age (e.g., polynomial function), which is continu-
ous at the cutoff value c [ 25-and-3-quarters; and 1fg is an indicator func-
tion. The parameter of interest is u, which measures a discontinuous mean
shift in outcomes at the age of 25-and-3-quarters. I estimate both parametric
and nonparametric regressions. For parametric estimation, as suggested by
Lee and Card (2008), standard errors are clustered at the age-in-quarters
level to account for potential misspecification errors at the cutoff, which
appears to be unavoidable given that the running variable (i.e., age in
quarters) is discrete in nature. For nonparametric estimation, I use a trian-
gular kernel that has optimality properties at boundary points (Cheng, Fan,
and Marron 1997), with optimal bandwidths suggested by Imbens and
776 ILR REVIEW

Kalyanaraman (2012) and Calonico, Cattaneo, and Titiunik (2014). As

robustness checks, I also use a rectangular kernel and the whole range of
bandwidths.
As a falsification check, I apply the RD regression in Equation (2) to the
pre-ACA period (2008–2009). If a perceivable discontinuity in outcomes
occurs during the pre-ACA period, then I examine a discontinuity in changes
in outcomes applying the following pre-post RD regression:

ð3Þ Yit ¼ a0 + f ðAgeit  c Þ + a1  1fAgeit  c g + f ðAgeit  c Þ  1fAgeit  c g + d  Postt

+ f ðAgeit  c Þ  Postt + u  1fAgeit  c g  Postt
+ a2  f ðAgeit  c Þ  1fAgeit  c g  Postt + Uit

where Postt is an indicator for the post-ACA period (2011–2013) and all
other variables are the same as in Equation (2). The parameter of interest,
u, measures a discontinuity in changes in outcomes from 2008–2009 to
2011–2013.

Test for the Location of a Discontinuity: Hansen Test

To assess whether a discontinuity occurs at the age of 25-and-3-quarters but
not elsewhere, I conduct a formal test for the location of a discontinuity in
the spirit of Hansen (1999, 2000). Consider the following RD regression
model with a linear specification:

ð4Þ Yit = b0 + b1 ðAgeit  gÞ + b2  1fAgeit  gg + b3 ðAgeit  gÞ  1fAgeit  gg + Uit

where g is an imposed location of a discontinuity. I also apply a quadratic

specification. To test the null hypothesis that the location of a discontinuity
is g0 (H0: g = g0), I use the following likelihood ratio (LR) statistic:

S1 ðg0 Þ  S1 ð^gÞ
ð5Þ LR1 ðg0 Þ ¼ N
S1 ð^gÞ

where S1(g0) is the sum of squared residuals (SSR) under the null; S1(g) is
the SSR for a given g, and ^g = argmin S1(g). This minimization problem can
be solved by searching for g in the sample, at which the regression model
(4) best fits the data, that is, achieving the minimum SSR. Therefore, to esti-
mate ^g, I estimate the regression model (4) separately for each distinct
value of g 2 ½22; 29:75 by an increment of 0.25 (a quarter in age) using
samples of individuals aged 20 to 32.
The likelihood ratio test is to reject for large values of LR1(g0). Since the
asymptotic distribution of LR1(g0) is highly nonstandard, I use the ‘‘no-
rejection’’ region to construct a confidence interval by plotting the LR statis-
tic over the values of g with a horizontal line of a critical value (e.g., the 5%
critical value is 7.35), as suggested by Hansen (1999, 2000). For instance,
the 95% confidence interval is a set of values of g for which the LR statistic
is lower than or equal to 7.35.
 AFFORDABLE CARE ACT DEPENDENT COVERAGE MANDATE 777

Regression Kink Design

Bear in mind that even if there is no discontinuity in the labor supply of
young adults at age 25-and-3-quarters, it does not necessarily imply no effect
of the ACA dependent coverage mandate on labor supply. If young adults
working at a job that provides own-name ESI are forward-looking in their
option value of being covered by dependent-child ESI, then their labor sup-
ply responses would be gradual as their age approaches 26, rather than
abrupt at age 26. For example, a forward-looking 19-year-old young adult
with own-name ESI has expected benefits of being covered by dependent-
child ESI accumulated for a maximum of 7 years (until he turns 26) if he
chooses not to work. Similarly, a forward-looking 20-year-old young adult
with own-name ESI has expected benefits for a maximum of 6 years upon
choosing not to work. This implies that the present value of the cumulative
expected benefits of being covered by dependent-child ESI decreases gradu-
ally as their age approaches 26.
To conceptualize the aforementioned valuation of dependent-child
ESI in a simple way, suppose young adults are forward-looking in their option
value of dependent-child ESI with respect to their labor supply responses. I
have defined the present option value of cumulative expected benefits of
being covered by dependent-child ESI without being employed at age a as
follows:

X
26a
ð6Þ PV ða Þ ¼ ð1  bÞt V ðaÞ  F
t¼0

where b is a discount rate (0 \ b \ 1) assumed to be the same at each age

from 19 to 26; V(a) is the expected benefit of being covered by dependent-
child ESI at age a; and F is the fixed cost of getting a job (e.g., cost of job
searching) when a young adult turns 26. Of importance, the expected bene-
fit at age a, V(a), is assumed to decrease monotonically as age approaches
26, provided that young adults are forward-looking in their valuation of
dependent-child ESI. Therefore, the resulting labor supply responses would
also gradually decrease as their age approaches 26. Accordingly, as illus-
trated in Appendix Figure A1, the labor supply impact of the ACA depen-
dent coverage mandate will induce a positive slope of the change in
employment rate at the age of 25-and-3-quarters after the ACA dependent
coverage mandate (2011–2013) relative to before (2008–2009). To test this
kinked slope in changes in labor supply, I apply a regression kink (RK)
design (Card, Lee, Pei, and Weber 2015). In particular, I estimate the fol-
lowing pre-post RK regression:7

7
Since the age profile of employment rate among young adults exhibits a possible kink even prior to
the ACA (panel A of Appendix Figure A7), I examine a kink in changes in labor supply from the pre- to
post-ACA period.
778 ILR REVIEW

p
X
ð7Þ Yit = a0 + ½ap ðAgeit  c Þp + fp ðAgeit  c Þp  1fAgeit  c g + dPostt
p=1

+ gp ðAgeit  c Þp  Postt + up ðAgeit  c Þp  1fAgeit  c g  Postt  + Uit

where c [ 25-and-3-quarters; p indicates the polynomial order. The parame-

ter of interest, u1, measures a kink in changes in labor supply from the
pre- to post-ACA period. I estimate both parametric and nonparametric
regressions.

Results
Summary Statistics
Table 1 shows summary statistics for young adults aged 19 to 25 (treatment
group) and their older counterparts aged 26 to 32 (control group) before
and after the ACA dependent coverage mandate. The treatment and con-
trol groups are quite different in terms of observed characteristics, espe-
cially educational attainment, mainly because young adults aged 19 to 25
are more likely to be in school than those aged 26 to 32. Given that educa-
tion is one of the major determinants of labor market outcomes, the differ-
ence in education between the treatment and control groups implies they
might have differential trends in their labor market outcomes even before
the ACA dependent coverage mandate was implemented, which calls the
parallel trends assumption into question. Prior to the ACA, young adults
aged 19 to 25 had higher ESI coverage as a dependent child than those
aged 26 to 32. This gap increased after the ACA dependent coverage man-
date because of the increase in dependent-child ESI coverage among the
treatment group while almost no change occurred among the control
group. However, the pre-ACA gaps in labor market outcomes between the
treatment and control groups remained broadly unchanged after the ACA
dependent coverage mandate.

Results from the Difference-in-Differences Approach

The Effect on Health Insurance Coverage
Panel A of Appendix Figure A2 plots dependent-child ESI coverage for
young adults aged 19 to 25 (solid line) and those aged 26 to 32 (dotted
line) over time. The figure shows a stark increase of approximately 10 per-
centage points in dependent-child ESI coverage only among those young
adults aged 19 to 25 right after the implementation of the ACA dependent
coverage mandate. Consequently, as shown in panel B, any insurance cover-
age among those young adults aged 19 to 25 increased substantially by
approximately 6 percentage points.
Panel A of Table 2 presents the DD estimates of the effect of the ACA
dependent coverage mandate on insurance coverage. Panel A.1 reports the
 AFFORDABLE CARE ACT DEPENDENT COVERAGE MANDATE 779

Table 1. Summary Statistics

Age 19–25 Age 26–32 Difference

(1) (2) (3)

Panel A: Pre-ACA (2008–2009)

A.1. Characteristics
Female (%) 49.85 49.93 –0.08
Whites (%) 78.39 78.08 0.32
Hispanic (%) 18.04 19.89 –1.85***
Married (%) 15.80 49.16 –33.36***
High school dropout (%) 12.95 12.74 0.21
High school graduate (%) 27.53 24.33 3.20***
Some college or more (%) 58.05 60.94 –2.89***
A.2. Insurance
Percent with ESI as a dependent child 23.76 2.49 21.27***
Percent with own-name ESI 19.84 40.40 –20.57***
Percent with private insurance 54.42 60.93 –6.51***
Percent with public insurance 14.09 12.36 1.73***
Percent with any insurance 68.08 72.70 –4.62***
A.3. Labor supply
Percent employed 64.54 77.24 –12.70***
Percent working full time 39.25 62.11 –22.86***
Hour of work (per week) 21.92 30.87 –8.95***
Labor force participation (%) 74.07 83.55 –9.49***
Panel B: Post-ACA (2011-2013)
B.1. Insurance
Percent with ESI as a dependent child 35.13 2.58 32.55***
Percent with own-name ESI 13.33 36.87 –23.54***
Percent with private insurance 57.96 58.00 –0.03
Percent with public insurance 15.92 13.87 2.06***
Percent with any insurance 73.04 71.33 1.71***
B.2. Labor supply
Percent employed 63.17 76.23 –13.06***
Percent working full-time 35.62 60.30 –24.68***
Hour of work (per week) 20.85 30.03 –9.18***
Labor force participation (%) 74.74 83.74 –9.00***

Notes: Samples consist of 88,092 individuals aged 19 to 32 in the National Health Interview Survey
(NHIS) for 2008–2009 and 2011–2013. All means are weighted by the NHIS annual sampling weights.
Employer-sponsored insurance (ESI) coverage as a dependent child includes those covered by their
parents’ ESI, rather than their own-name ESI. Full-time workers include those who work 35 hours or
more per week. ACA, Affordable Care Act.
***Significant at the 1% level; ** 5% level; * 10% level.

estimates without accounting for differential time trends between the treat-
ment and control groups. Panel A.2 reports the estimates of a placebo
effect, that is, the difference in insurance coverage between the treatment
and control groups during the pre-ACA period (2008–2009) relative to an
earlier pre-ACA period (2004–2007). The estimates indicate no placebo
effect prior to the ACA dependent coverage mandate. Panel A.3 reports the
estimates of the differential pre-trends between the treatment and control
groups. The small and insignificant estimates strongly support the parallel
trends assumption. Finally, panel A.4 reports the DD estimates accounting
780 ILR REVIEW

Table 2. Effect of the ACA Dependent Coverage Mandate on Insurance

Coverage and Labor Supply

Panel A: Insurance coverage

Percent Percent Percent Percent Percent

with ESI with with with with
as a own-name private public any
dependent child ESI insurance insurance insurance

(1) (2) (3) (4) (5)

A.1. Without differential time trends

Age 19–25 3 Post-ACA (2011–13) 10.51*** –2.66** 7.48*** 0.19 7.38***
Sample size = 164,999 [6.13] [2.35] [8.50] [0.39] [14.37]
A.2. Placebo effect
Age 19–25 3 Pre-ACA (2008–09) –1.52 –0.38 0.04 0.18 0.44
Sample size = 91,006 [1.62] [0.53] [0.04] [0.29] [0.69]
A.3. Test for parallel trends
Age 19–25 3 time trend (2004–09) –0.31 –0.15 0.05 0.00 0.13
Sample size = 91,006 [1.40] [0.77] [0.23] [0.01] [0.79]
A.4. With differential time trends
Age 19–25 3 Post-ACA (2011–13) 10.73*** –1.49 6.86*** 0.58 6.87***
Sample size = 164,999 [9.05] [1.36] [7.86] [0.94] [10.78]

Panel B: Labor supply

Percent Percent working Hours of work Labor force

employed full time (per week) participation (%)
(1) (2) (3) (4)

B.1. Without differential time trends

Age 19–25 3 Post-ACA (2011–13) –1.44*** –3.11*** –0.83*** –0.08
[3.04] [5.06] [3.49] [0.20]
Sample size 167,189 167,189 165,893 167,189
B.2. Placebo effect
Age 19–25 3 Pre-ACA (2008–09) –2.06*** –2.81*** –1.20*** –1.32*
[3.06] [4.25] [3.75] [1.83]
Sample size 92,238 92,238 91,514 92,238
B.3. Test for parallel trends
Age 19–25 3 time trend (2004–09) –0.38** –0.66*** –0.26*** –0.35*
[2.62] [3.90] [3.34] [2.14]
Sample size 92,238 92,238 91,514 92,238
B.4. With differential time trends
Age 19–25 3 Post-ACA (2011–13) –0.27 –0.21 0.08 0.50
[0.37] [0.29] [0.21] [0.66]
Sample size 167,189 167,189 165,893 167,189

Notes: Samples consist of individuals aged 19 to 32 in the 2004–2013 National Health Interview Survey
(NHIS). All analyses are weighted by the NHIS annual sampling weights and adjusted for gender, race,
ethnicity, marital status, health status, and activity-limitation status; and age, year, and state fixed effects.
Estimated standard errors are corrected for heteroskedasticity and clustered at the age level. Values in
square brackets are the absolute values of t-ratios.
***Significant at the 1% level; ** 5% level; * 10% level.

for the differential time trends. The estimates suggest that the ACA depen-
dent coverage mandate increased dependent-child ESI coverage by 10.7
percentage points, resulting in an increase in any insurance by 6.9 percent-
age points.
 AFFORDABLE CARE ACT DEPENDENT COVERAGE MANDATE 781

The Effect on Labor Supply

Panels C through F of Appendix Figure A2 plot the labor supply (percent
employed, percent working full time, hours of work, and labor force partici-
pation rate) of young adults. First and foremost, the figures show graphical
evidence of a likely violation of the parallel trends assumption for the labor
supply outcomes—although the pre-trends seem to be parallel up to 2007,
they start diverging from 2008 mainly because the treatment and control
groups have been differentially affected by the Great Recession. Indeed,
Hoynes, Miller, and Schaller (2012) showed that the labor market outcomes
of young adults were worse than their older counterparts during the Great
Recession.
Panel B of Table 2 reports the corresponding DD estimates. In panel B.1,
at first glance, there appears to be the labor supply impact of the ACA
dependent coverage mandate. Panel B.2, however, shows that the placebo
effects are even larger for employment rate, hours of work, and labor force
participation than the DD estimates in panel B.1. In addition, panel B.3
shows that the treatment and control groups have significantly different
pre-trends in their labor supply.
Once accounting for these differential pre-trends, as reported in panel
B.4, I find no evidence of the labor supply impact of the ACA dependent
coverage mandate. In a similar spirit, Heim, Lurie, and Simon (2015) and
Slusky (2017) found no effect on labor supply, after accounting for the dif-
ferential pre-trends. I further conduct various robustness checks, and the
results support the main finding of no impact on the labor supply despite a
substantial increase in insurance coverage for young adults (see the Online
Appendix B for details).

Results from the Regression Discontinuity Approach

The Effect on Health Insurance Coverage
Figure 1 plots health insurance coverage by age in quarters after the ACA
dependent coverage mandate (2011–2013). The solid lines on both sides of
the age threshold are local linear regression estimates with the 95% confi-
dence intervals (dotted lines). Panel A shows a discontinuous increase in
dependent-child ESI coverage at age 25-and-3-quarters by approximately 7
percentage points. This increase in dependent-child ESI coverage leads to
an increase in private insurance (panel C), which results in an increase in
any insurance (panel E) by approximately 5 percentage points. Panel B
shows no discontinuity in own-name ESI, which is directly tied to employ-
ment status. If the labor supply of eligible young adults is reduced by the
increase in dependent-child ESI coverage, then own-name ESI coverage is
expected to decrease at age 25-and-3-quarters. Yet, panel B shows no
decrease in own-name ESI, signaling little to no effect of the ACA depen-
dent coverage mandate on labor supply, which will be examined in the next
section.
782 ILR REVIEW

Figure 1. Insurance Coverage by Age in Quarters

Source: National Health Interview Survey (NHIS), 2011–2013.

Notes: Each dot represents the average in age-in-quarter cell. The solid lines on both sides of the cutoff
line are regression estimates from a local linear regression. The dotted lines represent the 95% confi-
dence intervals. Employer-sponsored insurance (ESI) coverage as a dependent child includes those cov-
ered by their parents’ ESI, rather than their own-name ESI.

Table 3 reports the RD estimates for health insurance coverage. Both

parametric and nonparametric estimates confirm the graphical evidence.
Column (1) shows a substantial increase in dependent-child ESI at age 25-
and-3-quarters. Based on local linear regression estimates, the magnitude of
 AFFORDABLE CARE ACT DEPENDENT COVERAGE MANDATE 783

Table 3. Regression Discontinuities (RD) in Health Insurance Coverage

at Age 25-and-3-Quarters

Percent with ESI Percent with Percent with Percent with Percent with
as a dependent own-name private public any
child ESI insurance insurance insurance

(1) (2) (3) (4) (5)

A. Parametric
Quadratic control 8.06*** 1.05 5.94*** 1.31 7.15***
function in age in quarters [6.06] [0.68] [4.74] [1.09] [7.14]
Cubic control function 7.89*** 0.18 7.18*** –1.75 5.54***
in age in quarters [7.19] [0.10] [4.42] [1.28] [5.12]
Sample size 52,279 52,279 52,279 52,279 52,279
B. Nonparametric
B.1. Local linear regression
RD estimate 6.80*** –0.79 5.98*** –0.37 5.81***
[7.54] [0.60] [4.61] [0.43] [4.63]
IK-bandwidth 2.587 3.033 3.839 4.977 3.573
Sample size 19,782 23,554 29,129 36,779 27,225
RD estimate 5.84*** –0.77 4.39** –0.12 5.48***
[4.80] [0.50] [2.20] [0.09] [3.58]
CCT-bandwidth 1.462 2.321 1.734 2.019 2.455
Sample size 10,361 17,850 12,200 15,961 17,850
B.2. Local quadratic regression
RD estimate 5.01*** –1.17 4.34** –0.03 3.94*
[3.70] [0.56] [1.97] [0.01] [1.70]
CCT-bandwidth 2.522 2.851 3.088 2.399 2.564
Sample size 19,782 21,692 23,554 17,850 19,782

Notes: Samples consist of individuals aged 19 to 32 in the 2011–2013 National Health Interview Survey
(NHIS). Ages are measured in quarters. Parametric estimates (panel A) are adjusted for gender, race,
ethnicity, marital status, health status, activity-limitation status; year fixed effects; and weighted by the NHIS
annual sampling weights. Estimated standard errors are corrected for heteroskedasticity and clustered at
the age-in-quarters level. Nonparametric estimates (panel B) are based on a triangular kernel and
bandwidths suggested by Imbens and Kalyanaraman (2012) (IK-bandwidth) and Calonico, Cattaneo, and
Titiunik (2014) (CCT-bandwidth). Values in square brackets are the absolute values of t -ratios.
***Significant at the 1% level; ** 5% level; * 10% level.

the increase ranges from 5.8 to 6.8 percentage points (65.0 to 76.2%
increase from the baseline of 8.9% among those aged 23–25 in 2008–2009).
This increase in dependent-child ESI leads to an increase in private insur-
ance (column (3)) and, in turn, an increase in any insurance (column (5))
by 5.5 to 5.8 percentage points. There is no discrete change in own-name
ESI and public insurance. These results imply that most young adults who
obtained dependent-child ESI were previously uninsured.
As a robustness check, I estimate local linear regressions over all possible
bandwidths. The resulting estimates with the 95% confidence intervals are
plotted in Appendix Figure A5. All estimates are robust to almost the whole
range of bandwidths. In addition, I use a rectangular kernel instead of a tri-
angular kernel. The results reported in Appendix Table A7 are very similar
to those using a triangular kernel, as in Table 3. As a falsification check, I
784 ILR REVIEW

Figure 2. Labor Supply by Age in Quarters

Source: National Health Interview Survey (NHIS), 2011–2013.

Notes: Each dot represents the average in age-in-quarter cell. The solid lines on both sides of the cutoff
line are regression estimates from a local linear regression. The dotted lines represent the 95% confi-
dence intervals. Full-time workers include those employed and working 35 hours or more per week.

examine a discontinuity in the pre-ACA period (2008–2009) and find virtu-

ally no discontinuity at age 25-and-3-quarters in any type of insurance
(Appendix Figure A6). The RD estimates reported in Appendix Table A8
confirm the graphical evidence of no discontinuity. Therefore, the discon-
tinuous increases in health insurance coverage (dependent-ESI, private
insurance, and any insurance) in the post-ACA period (2010–2013) are
attributed to the effect of the ACA dependent coverage mandate.

The Effect on Labor Supply

Figure 2 plots the labor supply outcomes by age in quarters in the post-ACA
period (2011–2013). Panel A shows a slight decrease in employment rate at
the age of 25-and-3-quarters; however, the decrease is not significant at the
5% level—the 95% confidence intervals of the local linear regression
estimates on both sides of the age cutoff overlap each other. Other labor
supply outcomes also show no discernible discontinuity at age 25-and-3-
quarters (panels B through D). The corresponding RD estimates reported
 AFFORDABLE CARE ACT DEPENDENT COVERAGE MANDATE 785

Table 4. Regression Discontinuities (RD) in Labor Supply

at Age 25-and-3-Quarters

Percent Hours of Labor force

Percent working work participation
employed full time (per week) (%)

(1) (2) (3) (4)

A. Parametric
Quadratic control function in age in quarters –1.93 0.27 –0.34 –0.71
[1.56] [0.15] [0.53] [0.78]
Cubic control function in age in quarters –2.04 –0.82 –1.03 –1.71
[1.32] [0.49] [1.58] [1.65]
Sample size 52,790 52,790 52,372 52,790
B. Nonparametric
B.1. Local linear regression
RD estimate –2.77* –1.11 –1.15 –2.15
[1.81] [0.62] [1.35] [1.53]
IK-bandwidth 2.239 2.505 2.006 2.401
Sample size 16,118 19,032 15,052 17,076
RD estimate –2.75* –3.15 –1.27 –2.25*
[1.82] [1.51] [1.58] [1.70]
CCT-bandwidth 2.284 1.552 1.761 2.195
Sample size 18,029 12,323 14,141 16,118
B.2. Local quadratic regression
RD estimate –1.58 –3.49 –1.03 –2.22
[0.61] [1.35] [0.87] [1.08]
CCT-bandwidth 2.028 2.345 2.041 2.269
Sample size 16,118 18,029 15,999 18,029

Notes: Samples consist of individuals aged 19 to 32 in the 2011–2013 National Health Interview Survey
(NHIS). Ages are measured in quarters. Full-time workers include those who work 35 hours or more
per week. Parametric estimates (panel A) are adjusted for gender, race, ethnicity, marital status, health
status, activity-limitation status; year and state fixed effects; and weighted by the NHIS annual sampling
weights. Estimated standard errors are corrected for heteroskedasticity and clustered at the age-in-
quarters level. Nonparametric estimates (panel B) are based on a triangular kernel and bandwidths
suggested by Imbens and Kalyanaraman (2012) (IK-bandwidth) and Calonico, Cattaneo, and Titiunik
(2014) (CCT-bandwidth). Values in square brackets are the absolute values of t-ratios.
***Significant at the 1% level; ** 5% level; * 10% level.

in Table 4 confirm the visual evidence of no discontinuity in labor supply,

except for a marginally significant decrease in employment rate by 2.8 per-
centage points when a local linear regression is used (panel B.1). The esti-
mate becomes smaller and insignificant, however, with a local quadratic
specification (panel B.2).
As a falsification test, I examine a discontinuity in labor supply in the pre-
ACA period (2008–2009). Although Appendix Figure A7 shows no visible
discontinuity, the RD estimates reported in Appendix Table A9 show that
even in the pre-ACA period there was a discrete decrease in employment,
although insignificant, by 1.8 to 2.6 percentage points (panel B). The mag-
nitude is comparable to the 2.8 percentage-point decrease in the post-ACA
period (panel B.1 of Table 4). This finding suggests that the marginally sig-
nificant decrease in employment rate in the post-ACA period is likely a
786 ILR REVIEW

Table 5. Regression Discontinuities (RD) in Changes in Labor Supply

at Age 25-and-3-Quarters

Percent Hours of Labor force

Percent working work participation
employed full time (per week) (%)

(1) (2) (3) (4)

A. Parametric
Quadratic control function in age in quarters 0.38 0.38 0.93 –0.18
[0.25] [0.15] [1.13] [0.12]
Cubic control function in age in quarters –0.63 0.26 0.79 –2.10
[0.38] [0.10] [1.10] [1.22]
Sample size 78,810 78,810 78,163 78,810
B. Nonparametric
B.1. Local linear regression
RD estimate –0.70 0.02 –0.04 –2.07
[0.26] [0.01] [0.02] [0.84]
IK-bandwidth 2.239 2.505 2.006 2.401
Sample size 24,036 28,443 22,466 25,504
RD estimate –0.69 –2.52 0.42 –1.03
[0.26] [0.69] [0.29] [0.44]
CCT-bandwidth 2.284 1.552 1.761 2.195
Sample size 26,906 18,356 21,069 24,036
B.2. Local quadratic regression
RD estimate –0.71 –3.86 0.81 –1.12
[0.16] [0.85] [0.39] [0.31]
CCT-bandwidth 2.028 2.345 2.041 2.269
Sample size 24,036 26,906 23,858 26,906

Notes: Samples consist of individuals aged 19 to 32 in the National Health Interview Survey (NHIS) for
2008–2009 and 2011–2013. Ages are measured in quarters. Full-time workers include those who work 35
hours or more per week. Parametric estimates (panel A) are adjusted for gender, race, ethnicity,
marital status, health status, activity-limitation status; year and state fixed effects; and weighted by the
NHIS annual sampling weights. Estimated standard errors are corrected for heteroskedasticity and
clustered at the age-in-quarters level. Nonparametric estimates (panel B) are based on a triangular
kernel and bandwidths suggested by Imbens and Kalyanaraman (2012) (IK-bandwidth) and Calonico,
Cattaneo, and Titiunik (2014) (CCT-bandwidth). Values in square brackets are the absolute values of
t-ratios.
***Significant at the 1% level; ** 5% level; * 10% level.

spurious artifact, rather than a real effect. To account for this spurious
mean shift in the employment rate in 2011 to 2013, I examine a discontinu-
ity in changes in labor supply from the pre-ACA period (2008–2009) to the
post-ACA period (2011–2013) by estimating the pre-post RD in Equation
(3). Table 5 presents the RD estimates. All estimates are small in magnitude
and statistically insignificant, providing no evidence of labor supply impact
of the ACA dependent coverage mandate. The 95% confidence intervals of
local linear regression estimates rule out a negative labor supply impact
larger than 5.9 percentage points. The results are robust to the whole range
of bandwidths and kernel weights (Appendix Figures A8 and A9).
 AFFORDABLE CARE ACT DEPENDENT COVERAGE MANDATE 787

Figure 3. Hansen Test for the Location of a Discontinuity in Health Insurance Coverage

Source: National Health Interview Survey (NHIS), 2011–2013.

Notes: Figure plots the likelihood ratio (LR) statistic over each potential discontinuity location (age in
quarters). The dotted line indicates the 5% critical value of 7.35. ESI, employer-sponsored insurance.

Test for the Location of a Discontinuity: Hansen Test

In this section, I conduct a formal test for the location of a discontinuity in
the spirit of Hansen (1999, 2000). Figure 3 plots the likelihood ratio (LR)
statistic for each assumed discontinuity in health insurance coverage in
2011 to 2013. The horizontal dotted line indicates the 5% critical value of
7.35. Panel A shows that the location of a discontinuity in dependent-child
788 ILR REVIEW

Figure 4. Hansen Test for the Location of a Discontinuity in Labor Supply

Source: National Health Interview Survey (NHIS), 2011–2013.

Notes: Figure plots the likelihood ratio (LR) statistic over each potential discontinuity location (age in
quarters). The dotted line indicates the 5% critical value of 7.35.

ESI is exactly the age of 25-and-3-quarters with an extremely tight confi-

dence interval. The location estimate and its 95% confidence interval con-
firm this (Appendix Table A10). Similarly, the location of discontinuities in
private insurance (panel C) and any insurance (panel E) is exactly the age
of 25-and-3-quarters with tight confidence intervals. By contrast, the
locations of discontinuities in own-name ESI (panel B) and public insur-
ance (panel D) are not the age of 25-and-3-quarters, and the 95% confi-
dence intervals do not include the age of 25-and-3-quarters either.
Therefore, the results support that the discontinuous increases in insurance
coverage (dependent-ESI, private insurance, and any insurance) are attrib-
uted to the effect of the ACA dependent coverage mandate.
Figure 4 plots the LR statistic for the labor supply outcomes. Panel A
shows that the location of a discontinuity in employment rate is the age of
23, which is far from the age of 25-and-3-quarters. Indeed, the 95% confi-
dence interval does not include the age of 25-and-3-quarters (Appendix
Table A11). Similarly, the locations of discontinuities in all other labor sup-
ply outcomes (panels B through D) are not the age of 25-and-3-quarters,
 AFFORDABLE CARE ACT DEPENDENT COVERAGE MANDATE 789

and the 95% confidence intervals do not include the age of 25-and-3-
quarters. Thus, the results of the Hansen test support the findings in the
previous section: no labor supply effect of the ACA dependent coverage
mandate.

Subgroup Analysis and Power Calculation

I consider a possibility that different labor supply responses from different
subgroups may result in no overall effect. Of particular interest is potentially
different labor supply responses by gender, given well-documented gender
differences in labor supply. Thus, I perform RD analyses by gender and find
no labor supply impact for either men or women (see the Online Appendix
C for details). These findings differ from Dahlen (2015) and Yörük and Xu
(2019). Applying a quadratic specification, Dahlen (2015) found an
increase in employment at age 26 among unmarried men. However, the
result appears sensitive to the functional form specification. When applying
a quadratic specification to unmarried men aged 24 to 28 as in Dahlen
(2015), I find an employment effect; however, the effect vanishes when a
linear specification is used. Yörük and Xu (2019) also found an employ-
ment effect when applying a quadratic specification, but not for a linear
specification. Their nonparametric estimates are sensitive to the choice of
bandwidth and kernel. Unlike these two studies, my findings of no labor
supply effect are robust to functional forms, bandwidths, and kernel
weights.
Next, I conduct a power analysis to assess whether the study sample
(young adults aged 19–32 in the 2011–2013 NHIS) provides enough statisti-
cal power to support the null findings on the labor supply impact of the
ACA dependent coverage mandate. The results show that the study sample
is well powered at least to detect the claimed effects from the two studies
(Dahlen 2015; Yörük and Xu 2019) that apply an RD approach (see the
Online Appendix D for details).

Results from the Regression Kink Approach

In the previous section, I found no discontinuous change in the labor sup-
ply of young adults at age 25-and-3-quarters. As explained in the regression
kink design section, however, no discontinuity at age 25-and-3-quarters does
not necessarily lead to the conclusion of no labor supply impact of the ACA
dependent coverage mandate. I thus apply an RK approach to examine a
kinked slope in changes in labor supply at the age of 25-and-3-quarters after
the ACA dependent coverage mandate relative to before.
Figure 5 plots changes in labor supply from the pre-ACA period (2008–
2009) to the post-ACA period (2011–2013), with local linear regression
estimates on both sides of the age threshold. Panel A shows visually no kink
in the change in employment rate at age 25-and-3-quarters. Both parametric
and nonparametric estimates from the pre-post RK regression in Equation
790 ILR REVIEW

Figure 5. Change in Labor Supply from 2008–2009 to 2011–2013

Source: National Health Interview Survey (NHIS).

Notes: Each dot represents the average in age-in-quarter cell. The solid lines on either side of the cutoff
line are regression estimates from a local linear regression. The dotted lines represent the 95% confi-
dence intervals. Full-time workers include those employed and working 35 hours or more per week.

(7) confirm this finding (column (1) in Table 6): No kinked slope in the
change in employment rate at age 25-and-3-quarters, which rejects the
hypothesized labor supply responses from forward-looking young adults as
explained in the regression kink design section. The same results are
observed for other labor supply outcomes (panels B through D of Figure 5
and columns (2) through (4) in Table 6). Results are robust to almost the
whole range of bandwidths and kernel weights (Appendix Figures A15 and
A16).
I next conduct the Hansen test for the location of a kink. The results of
the test are summarized in Appendix Figure A17 and Appendix Table A18.
For all labor supply outcomes, the location of a kink does not correspond
to the age of 25-and-3-quarters, and the 95% confidence intervals do not
include the age of 25-and-3-quarters. I then perform a subgroup analysis by
gender. Appendix Table A19 reports the nonparametric RK estimates for
changes in labor supply from the pre- to post-ACA period separately for
men and women. None of the estimates are significant, and indeed most
 AFFORDABLE CARE ACT DEPENDENT COVERAGE MANDATE 791

Table 6. Regression Kinks (RK) in Changes in Labor Supply

at Age 25-and-3-Quarters

Percent Hours of Labor force

Percent working work per participation
employed full time week (%)

(1) (2) (3) (4)

A. Parametric
Linear control function in age in quarters 0.21 –0.45 –0.08 0.07
[0.78] [1.03] [0.58] [0.22]
Quadratic control function in age in quarters 0.15 –2.14 –0.82 1.19
[0.14] [1.34] [1.55] [0.98]
Sample size 78,810 78,810 78,163 78,810
B. Nonparametric
B.1. Local linear regression
RK estimate –2.24 –2.82 –1.57 –1.34
[0.79] [1.06] [1.20] [0.61]
CCT-bandwidth 1.976 2.199 1.958 2.125
Sample size 21,224 24,036 21,069 24,036
B.2. Local quadratic regression
RK estimate –2.17 –6.61 –1.56 0.09
[0.35] [0.78] [0.59] [0.01]
CCT-bandwidth 2.779 2.414 2.907 2.531
Sample size 32,718 26,906 32,472 29,845

Notes: Samples consist of individuals aged 19 to 32 in the National Health Interview Survey (NHIS) for
2008–2009 and 2011–2013. Ages are measured in quarters. Full-time workers include those who work 35
hours or more per week. Parametric estimates (panel A) are adjusted for gender, race, ethnicity,
marital status, health status, activity-limitation status; year and state fixed effects; and weighted by the
NHIS annual sampling weights. Estimated standard errors are corrected for heteroskedasticity and
clustered at the age-in-quarters level. Nonparametric estimates (panel B) are based on a triangular
kernel and bandwidths suggested by Calonico, Cattaneo, and Titiunik (2014) (CCT-bandwidth). Values
in square brackets are the absolute values of t-ratios.
***Significant at the 1% level; ** 5% level; * 10% level.

estimates are negative rather than positive. Overall, the results from the RK
analyses suggest no evidence of the labor supply impact of the ACA depen-
dent coverage mandate.

Conclusion
In this article, I examine the effect of the ACA dependent coverage man-
date on health insurance and labor supply by applying three different
approaches (DD, RD, and RK designs), with extensive robustness checks
and falsification tests, along with a formal test for the location of discontinu-
ity and kink in the spirit of Hansen (1999, 2000). I find no discernible evi-
dence of the labor supply impact of the ACA dependent coverage mandate
despite its substantial impact on insurance coverage for young adults, with
an increase in dependent-child ESI of 5.8 to 6.8 percentage points during
the first three years after its implementation (2011–2013).
792 ILR REVIEW

According to the employment-lock phenomenon (Garthwaite, Gross, and

Notowidigdo 2014), scholars expect that some young-adult workers who
remained employed to maintain their health insurance (own-name ESI)
may decide not to work because they can obtain health insurance through
dependent-child ESI, which will then lead to a decrease in own-name ESI
among young adults. I find no perceivable decrease in own-name ESI, how-
ever, and find the increase in dependent-child ESI results in an increase in
any insurance coverage by 5.5 to 5.8 percentage points. This implies that
the increased dependent-child ESI is almost entirely driven by a decrease in
previously uninsured young adults.
Note that this finding, namely no change in labor supply with the
increased insurance coverage in 2011 to 2013, does not necessarily rule out
the employment-lock phenomenon if there exists a binding condition for
labor supply responses. One such condition is that until 2014 grandfathered
plans were not required to offer dependent-child ESI to those young-adult
workers who obtained insurance through their own-name ESI (aka, the
grandfathered plan rule).
Finally, the findings of this article may not generalize to the provision of
other health insurance (e.g., Medicaid), as beneficiary groups might have
differential valuations of health insurance in their labor supply decisions.
Indeed, studies have shown that Medicaid-eligible, low-income adults do
change their labor supply in response to the expansion (or contraction) of
Medicaid (Garthwaite, Gross, and Notowidigdo 2014; Kim 2016; Dague,
DeLeire, and Leininger 2017).

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