2019 Reports

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

Shi, Maggie

The 2010 Affordable Care Act introduced a mandate expanding dependent health insurance coverage to young adults up to age 26. I explore whether this expansion induced job lock for parents of eligible young adults, since many parents’ health insurance is tied to employment. Using a difference-in-difference strategy comparing parents of children above and below the age cutoff, I find that the mandate reduced parents’ retirement rate by 2.9 percentage points, causing them to delay retirement up to 1.7 years. Early retirees are very responsive, as well as individuals with Social Security eligible spouses, suggesting the mandate interacted with Social Security.