Public Insurance and Corporate Investment: Evidence from ACA Medicaid Expansion

25 Pages Posted: 25 Apr 2019

See all articles by John (Jianqiu) Bai

John (Jianqiu) Bai

Northeastern University - D'Amore-McKim School of Business

Wang Jin

Massachusetts Institute of Technology (MIT)

Yue Qiu

Temple University

Date Written: March 23, 2019

Abstract

We exploit the implementation of state-level ACA Medicaid expansion to study the effect of public insurance on corporate investment. We focus on the U.S. manufacturing sector. We find that the expansion of Medicaid leads to an increase in employment and a decrease in capital investment, particularly new machinery and computer related spending, at the plant level. Our results are consistent with the notion that expanding public insurance facilitates the matches between employees and employers and firms adjust capital investment policies as a response.

Keywords: Corporate Investment; Labor; Healthcare

JEL Classification: E20; E22; I13

Suggested Citation

Bai, John (Jianqiu) and Jin, Wang and Qiu, Yue, Public Insurance and Corporate Investment: Evidence from ACA Medicaid Expansion (March 23, 2019). Available at SSRN: https://ssrn.com/abstract=3358959 or http://dx.doi.org/10.2139/ssrn.3358959

John (Jianqiu) Bai (Contact Author)

Northeastern University - D'Amore-McKim School of Business ( email )

Boston, MA 02115
United States

Wang Jin

Massachusetts Institute of Technology (MIT) ( email )

77 Massachusetts Avenue
50 Memorial Drive
Cambridge, MA 02139-4307
United States

Yue Qiu

Temple University

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