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Title: Evaluating the Causal Impact of Health Insurance Coverage on the Labor Market Outcomes of Young Adults
Citation Type: Dissertation/Thesis
Publication Year: 2016
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Abstract: One of the first provisions enacted under the Patient Protection and A↵ordable Care Act (PPACA) was was the Young Adult Coverage Expansion, which took e↵ect on September 23, 2010. Under this provision, individuals up to age 26, can remain on their parent’s employer provided health insurance plan. Relatively little is known about the e↵ect of insurance coverage on the labor supply of young adults. In this paper, I ex- ploit the exogenous expansion of health insurance coverage among a segment of young adults as an instrumental variable to control for the endogeneity of health insurance status. This allows me to estimate causal labor market e↵ects of insurance coverage. I leverage a di↵erence-in-di↵erence design in the first stage of a two-stage control func- tion to estimate the e↵ect of the law on the probability of insurance coverage and use the predicted residual from this stage as my instrument in the second stage regression. The main structural equation estimates the causal e↵ect of insurance coverage on the likelihoods of working part time, full time, not working and being self-employed among 22-29 year olds. Using data from the 2006 to 2015 March Current Population Survey (CPS) I find that eligibility for the mandate is associated with a 5.2-5.7 percentage point increase in insurance rates among young adults. As a result of gaining access to insurance, 22-29 year olds are more likely to be self-employed, to not work, and to work part time. They are less likely to work full time. These results are consistent with the classical economics theory behind the role of social welfare provision and work incentives.
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Authors: Volkov, Eden
Institution: CUNY Hunter College
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Degree: Master of Arts in Economics
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Pages: 34
Data Collections: IPUMS USA
Topics: Aging and Retirement, Labor Force and Occupational Structure, Other
Countries: United States