THE AFFORDABLE CARE ACT AND COLLEGE ENROLLMENT DECISIONS

We investigate the effect of the expansion of the federal dependent coverage mandate for young adults under the Affordable Care Act (ACA) on college enrollment decisions of young Americans. The expansion removes the requirement that young individuals need to be enrolled as full‐time students in order to remain on their parents' health insurance past the age of 18 and expands the coverage mandate to age 26 irrespective of student status. This changes the incentives for the full‐time college enrollment decisions of young individuals. We use panel data from the Survey of Income and Program Participation (SIPP) for the years 2003–2013 and estimate that the dependent coverage expansion under the ACA decreases the probability to enroll as full‐time student by 3 percentage points using a difference‐in‐differences framework. Furthermore, we find that part‐time college enrollment is unaffected by the new policy. The results are robust to changes in the model specification and become stronger when we increase the sample overlap between treatment and control groups using trimming based on propensity scores. (JEL C35, I23, I10, I18)