Panel Paper: The Affordable Care Act and the Market for Higher Education

Thursday, November 8, 2018
Wilson B - Mezz Level (Marriott Wardman Park)

*Names in bold indicate Presenter

Rajashri Chakrabarti and Maxim Pinkovskiy, Federal Reserve Bank of New York

Through changing the connection between insurance and employment, the Affordable Care Act has affected people's incentives to obtain education. We employ a triple-difference strategy that captures the differences in exposure of counties to the ACA and the associated Medicaid expansion to investigate changes in enrollment in different types of higher education institutions. We find consistent evidence in favor of relative increase in enrollment in less than 2-year for-profit colleges in counties exposed more to the ACA and Medicaid expansion, with nearly all the increase taking place after the 2012 Supreme Court decision that gave states the right to choose not to expand Medicaid. Differential enrollment is flat for all other comparable college types. We find this differential increase in less than 2-year for-profit enrollment to be remarkably general across demographic groups, with particularly strong effects for Hispanic, White and full-time students. Our findings are remarkably robust to controlling for a series of confounders including the differential impact of the Great Recession.