Public Insurance and Corporate Investment: Evidence from ACA Medicaid Expansion
25 Pages Posted: 25 Apr 2019
Date Written: March 23, 2019
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: Suggested Citation