Does Medicaid Generosity Affect Household Income?
42 Pages Posted: 15 Mar 2017 Last revised: 15 May 2017
Date Written: December 30, 2016
Almost all of the recent literature on Medicaid and labor supply has used ACA-induced Medicaid eligibility expansions in various states as natural experiments. Estimated effects on employment and earnings differ widely due to differences in the scope of eligibility expansions across states. Using a Regression Kink Design (RKD) framework, this paper takes a uniquely different approach to the identification of the effect of Medicaid generosity on household income. Both state-level data and March CPS data from 1980-2013 suggest that generous federal funding of state-level Medicaid costs have a modest negative effect on household income. The negative impact of Medicaid generosity on household income is more pronounced at the lower end of the household income distribution and on household income of female heads.
Keywords: Medicaid, Household Income, Labor Supply
JEL Classification: C31, I13, J08, J22
Suggested Citation: Suggested Citation