The Effects of Expansions of Children’s Medicaid Eligibility on Program Participation and Labor Supply
I investigate whether expansions of eligibility rules for Medicaid affected participation and take-up behavior of families for other safety net programs. These spillovers could result from mechanisms such as new Medicaid applicants gaining information about other programs from a caseworker, or changes in labor supply that affect families’ eligibility for other programs. I construct a simulated instrument for Medicaid eligibility that applies eligibility rules for each state and year to a fixed sample, and thus creating a measure that varies only due to changes in policy rules and not demographic or economic characteristics. My primary contribution is to separately estimate the effects of Medicaid expansions on take-up and eligibility rates of other safety net programs, rather than simple participation rates. Focusing only on participation rates obscures larger but offsetting effects of Medicaid expansions on take-up and eligibility. I find that Medicaid expansions moderately increase program participation, but that relatively larger increases in program take-up are partially offset by a reduction in eligibility for other safety net programs. For example, a 10 percentage point expansion in federal Medicaid eligibility increases food stamp participation by 0.3 percentage points. Food stamp take-up rises by 1.1 percentage points, but eligibility for food stamps falls by over 0.7 percentage points. This reduction in eligibility is driven by an increase in labor supply caused by Medicaid expansions. These results suggest that there are meaningful unintended spillovers from modifying safety net programs.
Works in Progress:
Income Growth and its Distribution from Eisenhower to Obama: the Growing Importance of In-Kind Transfers (1959-2016) (with Professor Richard V. Burkhauser)
We construct a novel data set to extend comprehensive measures of income using survey data back to before the implementation of Great Society programs such as Medicare, Medicaid, and food stamps. The Current Population Survey (CPS) is the primary data set for this purpose, but the CPS only contains information on in-kind transfers after 1979. We combine the CPS with other data sources and impute these receipt of these benefits going back to 1959, prior to the implementation of many major transfer programs. In doing so, we more completely capture the growth in incomes across the income distribution since 1959. We find that while median tax-unit income has stagnated since its 1969 peak, more comprehensive measures of income have grown substantially. Moreover, while tax-unit incomes of the bottom quintiles fell since their 1969 peaks, this loss is reversed when accounting for additional resources available to households including transfer income, tax credits, and in-kind transfers. Under our most comprehensive measure including the value of Medicare and Medicaid in a household’s income we find that income inequality still rose over this period, but the increase in inequality is substantially smaller than when estimated under alternative measures of income. A version of this paper has been submitted to the Oxford University Press.
The Effects of Income on Health Care Spending Among the Elderly
In recent decades per-capita expenditures on health care in the U.S. have grown much faster than GDP. There are many potential drivers of rising expenditures, but little consensus as to which drivers matter most. The effects of income shocks on the elderly are of interest because the elderly comprise a disproportionate share of total health care expenditures. I study the effects of plausibly exogenous variation in Social Security income on health care expenditures among the elderly inadvertently introduced by the Social Security Act of 1972. Some birth cohorts received substantially higher Social Security payments as a result, and I employ an instrumental variable strategy using membership in these cohorts to identify the income elasticity of health care expenditures. I find evidence that higher income increases health care expenditures among households for which the head has less than a high school education, but also provide evidence that higher incomes leads the elderly to purchase more health insurance. These findings indicate that the low-income elderly may be particularly exposed to large financial risk due to negative health shocks.