It's about time: Effects of the Affordable Care Act on young adults' time use

One of the main purposes of the Affordable Care Act (ACA) is to enable Americans to make more productive use of their time. This is apparent in the rationale given for the ACA’s extension of dependent care coverage (DCC), requiring employer-sponsored insurance plans that cover the children of insured workers to continue to cover these dependents until they turn 26.  In the Federal Register, the Administration states that providing health insurance for these dependents should “decrease the cost-shifting of uncompensated care onto those with coverage, increase the receipt of preventive health care and provide more timely accessto high quality care”.  It will permit “greater job mobility… (as) health coverage will no longer be tied to their own jobs or student status”.

We use the 2003-2013 American Time Use Surveys to answer four key questions, providing several contributions to the literature on the ACA and providing the first such study on time-use among young adults. First, we assess and confirm the prediction that gaining coverage under the DCC would reduce labor supply using detailed data on time-use.  Second, given that the provision reduced work time, the question arises, what have these young adults done with the extra time? Third, we provide some of the first evidence on time spent receiving and waiting for medical care, capturing shifts in the use of medical care inputs associated with a shift from being uninsured to gaining coverage.  Finally, a related question is whether all of these changes have made young adults better off.  We assess this prediction with a novel module on subjective well-being.  While measuring effects of gaining insurance on young adults’ objective well-being (i.e., health and finances) are certainly necessary, an equally valid question and component into benefit calculus relates to whether the beneficiaries of the law themselves think it has improved their lives.

Models are based on a difference-in-differences framework.  Results suggest that the DCC has reduced job-lock, as well as the duration of the average doctor’s visit among persons ages 19-25.  The latter effect partly reflects a substitution from hospital ER utilization to greater routine care.  The extra non-work time has gone into socializing, and to a lesser extent, into education and job-search.  Availability of insurance and change in work time appear to have increased young adults’ subjective well-being, enabling them to spend time on activities they view as more meaningful than those they did before insurance became available.