Measuring the ACA’s Parental Mandate Using Difference-in-Differences

The Affordable Care Act lets young adults stay on their parents’ insurance. Several recent papers use broad age-time difference-in-differences strategies to argue that this causes significant health insurance and labor effects. Using SIPP and CPS data, I show that difference-in-differences models over “placebo” dates also produce statistically significant “effects” long before ACA implementation, even with conservative standard errors and matching adjustments. This suggests that the effects attributed to the ACA could instead reflect dynamics in the age-structure of the health insurance and labor markets. Reducing the age bandwidth yields more reliable estimates of the extent of increases in insurance coverage