Do Children on Medicaid Benefit from a Weak Labor Market? Evidence from the Great Recession
39 Pages Posted: 20 Nov 2019 Last revised: 30 Mar 2020
Date Written: March 13, 2020
In this article, I estimate the association between weak labor market conditions and the quantity of office-based physician services received by children enrolled in Medicaid. I find that children use more services in areas with higher unemployment during the Great Recession, and the result is not influenced by changes in sample composition. The association could reflect either demand factors such as worsening health or supply factors such as changes in the number of physicians willing to accept Medicaid patients. I provide several pieces of evidence supporting a supply-side mechanism: higher unemployment reduces the demand for physician services by privately-insured patients. Physicians respond to the demand shock by serving more Medicaid enrollees.
JEL Classification: I11, I13, E32
Suggested Citation: Suggested Citation