Job Lock and Dependent Health Insurance: Evidence from the Affordable Care Act

One of the most popular and well-publicized components of the 2010 Affordable Care Act was the mandate to expand dependent health insurance coverage to young adults up to age 26. This paper explores whether dependent coverage expansion induced job lock for parents of eligible young adults, since many parents' health insurance coverage is tied to employment. Using a difference-in-differences strategy comparing parents of children above and below the age cutoff, I find that parents delay retirement and Social Security claiming in response to the mandate. I find heterogeneous effects depending on Social Security eligibility. Individuals eligible for early Social Security are very responsive, as well as individuals who themselves are Social Security-ineligible but are married to Social Security-eligible spouses. I find no effect of the mandate on other dimensions of labor supply, such as non-retirement exits and employer changes.