Does Medicaid Expansion Affect Employment Transitions?
43 Pages Posted: 31 Dec 2016 Last revised: 2 May 2018
Date Written: April 21, 2018
This paper investigates the pre/post labor market implications of the Affordable Care Act's (ACA) Medicaid expansion for a population near the eligibility cutoff. Using an arguably exogenous variation at the eligibility cutoff, I find that Medicaid enrollment increases for adults without dependent children. This leads to an employment transition from full-time (≥35 Hrs) to part-time employment (<35 Hrs) after the expansion. The employment transition is mainly driven by the increase in employment for working less than 20 hours. These findings support the presence of employment lock -- individuals who are employed primarily to retain health benefits. Replication of existing studies that used difference-in-differences (DD) models with expansion states as the treatment yield no employment effects. The treatment group in these models, however, is large and heterogeneous.
Keywords: ACA's Medicaid expansion, labor market outcomes, employment-lock, difference-in-discontinuities
JEL Classification: C21, J21, J26, I10
Suggested Citation: Suggested Citation