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Why Did the SSI-Disabled Program Grow So Much? Disentangling the Effect of Medicaid

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  • Aaron Yelowitz

Abstract

The number of participants in the SSI program grew by 1.1 million from 1987 to 1993. This paper examines the role of Medicaid on the SSI participation decision. I use the rapid growth in average Medicaid expenditure as a proxy for its value. OLS estimates of Medicaid's effect may be biased because of omitted variables bias and measurement error. I therefore apply two-stage least squares to estimate Medicaid's effect, using average Medicaid expenditure for blind SSI recipients as an instrument. These estimates show that rising Medicaid expenditure significantly increased SSI participation among adults with low permanent incomes, explaining 20 percent of the growth.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 6139.

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Date of creation: Aug 1997
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Publication status: published as Journal of Health Economics, Vol. 17, no. 3 (June 1998): 321-350.
Handle: RePEc:nbr:nberwo:6139

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  1. R. A. Moffitt, . "The effect of work and training programs on entry and exit from the welfare caseload," Institute for Research on Poverty Discussion Papers, University of Wisconsin Institute for Research on Poverty 1025-93, University of Wisconsin Institute for Research on Poverty.
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  13. Yelowitz, Aaron S, 2000. "Using the Medicare Buy-In Program to Estimate the Effect of Medicaid on SSI Participation," Economic Inquiry, Western Economic Association International, Western Economic Association International, vol. 38(3), pages 419-41, July.
  14. Rebecca M. Blank, 1989. "The Effect of Medical Need and Medicaid on AFDC Participation," Journal of Human Resources, University of Wisconsin Press, vol. 24(1), pages 54-87.
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  18. Anne E. Winkler, 1991. "The Incentive Effects of Medicaid on Women's Labor Supply," Journal of Human Resources, University of Wisconsin Press, vol. 26(2), pages 308-337.
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Cited by:
  1. A. S. Yelowitz, . "Using the Medicare Buy-In Program to Estimate the Effect of Medicaid on SSI Participation," Institute for Research on Poverty Discussion Papers, University of Wisconsin Institute for Research on Poverty 1102-96, University of Wisconsin Institute for Research on Poverty.
  2. Bruce D. Meyer & James X. Sullivan, 2001. "The Effects of Welfare and Tax Reform: The Material Well-Being of Single Mothers in the 1980s and 1990s," NBER Working Papers 8298, National Bureau of Economic Research, Inc.
  3. Gina Livermore & David Stapleton & Henry Claypool, 2009. "Costs and Benefits of Eliminating the Medicare Waiting Period for SSDI Beneficiaries," Mathematica Policy Research Reports, Mathematica Policy Research 6218, Mathematica Policy Research.
  4. Jonathan Gruber & Brigitte C. Madrian, 2002. "Health Insurance, Labor Supply, and Job Mobility: A Critical Review of the Literature," NBER Working Papers 8817, National Bureau of Economic Research, Inc.
  5. Brigitte C. Madrian, 2005. "The U.S. health care system and labor markets," Conference Series ; [Proceedings], Federal Reserve Bank of Boston, Federal Reserve Bank of Boston, vol. 50(Jun), pages 137-163.
  6. Jonathan Gruber, 1997. "Health Insurance for Poor Women and Children in the U.S.: Lessons from the Past Decade," NBER Chapters, in: Tax Policy and the Economy, Volume 11, pages 169-211 National Bureau of Economic Research, Inc.
  7. Jonathan Gruber, 2003. "Medicaid," NBER Chapters, in: Means-Tested Transfer Programs in the United States, pages 15-78 National Bureau of Economic Research, Inc.
  8. Akinori Tomohara & Ho Lee, 2007. "Did State Children’s Health Insurance Program Affect Married Women’s Labor Supply?," Journal of Family and Economic Issues, Springer, Springer, vol. 28(4), pages 668-683, December.
  9. Elizabeth Powers & David Neumark, 2001. "The Supplemental Security Income Program and Incentives to Take Up Social Security Early Retirement: Empirical Evidence from Matched SIPP and Social.," NBER Working Papers 8670, National Bureau of Economic Research, Inc.
  10. Lahiri, Kajal & Song, Jae & Wixon, Bernard, 2008. "A model of Social Security Disability Insurance using matched SIPP/Administrative data," Journal of Econometrics, Elsevier, Elsevier, vol. 145(1-2), pages 4-20, July.
  11. Marton, James & Yelowitz, Aaron, 2014. "Health Insurance Generosity and Conditional Coverage: Evidence from Medicaid Managed Care in Kentucky," MPRA Paper 57412, University Library of Munich, Germany.
  12. Elizabeth T. Powers & David Neumark, 2003. "The Supplemental Security Income Program and Incentives to Claim Social Security Retirement Early: Empirical Evidence from Matched SIPP and Social Security Administrative Files," Working Papers, University of Michigan, Michigan Retirement Research Center wp036, University of Michigan, Michigan Retirement Research Center.
  13. Todd Elder & Elizabeth Powers, 2006. "Public Health Insurance and SSI Program Participation Among the Aged," Working Papers, University of Michigan, Michigan Retirement Research Center wp117, University of Michigan, Michigan Retirement Research Center.

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