The Effects of Medicaid Expansion on Labor Market Outcomes: Evidence from Border Counties

40 Pages Posted: 1 Oct 2018 Last revised: 5 Feb 2023

See all articles by Lizhong Peng

Lizhong Peng

University of West Georgia

Xiaohui Guo

Hebei University, Baoding, China

Chad D. Meyerhoefer

Lehigh University

Date Written: September 2018

Abstract

This paper provides new empirical evidence on the employment and earning effects of the recent Medicaid expansion. Unlike most existing studies that use a conventional state and year fixed effects approach, our main identification strategy is based on the comparison of employment and wages in contiguous county-pairs in neighboring states (i.e. border counties) with different Medicaid expansion status. Using the 2008-2016 Quarterly Census of Employment and Wages, we estimate a set of distributed lag models in order to examine the dynamic effects of Medicaid expansion. Results from our preferred specification suggest a small but statistically significant decrease in employment of 1.3 percent one year after the Medicaid expansion. This disemployment effect is transitory and appears to primarily occur in low-wage sectors. In particular, employment returns to pre-expansion levels within two years. We also do not find any statistically significant effect of the Medicaid expansion on wages at any point.

Suggested Citation

Peng, Lizhong and Guo, Xiaohui and Meyerhoefer, Chad D., The Effects of Medicaid Expansion on Labor Market Outcomes: Evidence from Border Counties (September 2018). NBER Working Paper No. w25105, Available at SSRN: https://ssrn.com/abstract=3258203

Lizhong Peng (Contact Author)

University of West Georgia ( email )

1601 Maple St
Carrollton, GA 30118-3030
United States
30118 (Fax)

Xiaohui Guo

Hebei University, Baoding, China ( email )

Baoding, Hebei
China

Chad D. Meyerhoefer

Lehigh University ( email )

621 Taylor Street
Bethlehem, PA 18015
United States

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