Working Paper: NBER ID: w21846
Authors: Gopi Shah Goda; Monica Farid; Jay Bhattacharya
Abstract: The dependent care mandate is one of the most popular provisions of the 2010 Affordable Care Act (ACA). This provision requires that employer-based insurance plans cover health care expenditures for workers with children 26 years old or younger. While there has been considerable scholarly and policy interest in the effects of this mandate on health insurance coverage among young adults, there has been little scholarly work measuring the costs and incidence of this mandate and who pays the costs of it. In our empirical work, we exploit the fact that some states had dependent care mandates in years prior to the passage of the ACA. Using data from the Survey of Income and Program Participation (SIPP), we find that workers at firms with employer-based coverage – whether or not they have dependent children – experience an annual reduction in wages of approximately $1,200. Our results imply that the marginal costs of mandated employer-based coverage expansions are not entirely borne only by the people whose coverage is expanded by the mandate.
Keywords: health insurance; Affordable Care Act; dependent care mandate; wage offset; labor market
JEL Codes: I11; I13; J3
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| nonparents (J13) | costs of mandate (J32) |
| costs of mandated benefits (J32) | all workers (J89) |
| dependent care mandate costs (J32) | wage offsets (J38) |
| ACA dependent care mandate (G52) | worker wages (J31) |
| firm size (fewer than 100 employees) (L25) | wage reduction (J31) |