The Affordable Care Act and College Enrollment Decisions

Abstract

We investigate the effect of the extension of the federal dependent coverage mandate for young adults under the Affordable Care Act (ACA) on the college enrollment decisions of young Americans. The ACA removes the conditionality that young individuals need to be enrolled as full-time students in order to be able to remain on their parents' health insurance past the age of 18 and extends the coverage mandate to age 26 irrespective of student status. This expansion of the coverage mandate will change the incentives for the full-time and part-time college enrollment decisions of young individuals. We use panel data from the Survey of Income and Program Participation (SIPP) for the years 2008 to 2013 and estimate that the dependent coverage expansion under the ACA decreases the probability to enroll as full-time student by 2 to 3 percentage points. Furthermore we find that part-time college enrollment is unaffected by the new policy. The results from a difference-in-differences model are robust to changes in the model specification and become stronger when we increase the sample overlap between treatment and control groups using various propensity score methods.

Keywords: Affordable Care Act, dependent health insurance coverage, youth health insurance, occupational choice, educational choice, survey of income and program participation (SIPP)

JEL Classification: C35, I23, I10, I18