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Medicaid and Wealth: A Re-Examination

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  • Gittleman Maury

    () (Bureau of Labor Statistics)

Abstract

Do public insurance programs crowd out private savings? I examine the relationship between Medicaid and wealth and make a contribution to the literature on this issue in two primary ways. First, I apply the instrumental-variables approach developed by Gruber and Yelowitz (1999) to a different dataset, the National Longitudinal Survey of Youth, 1979 (NLSY79), while at the same time examining an alternative instrument. The results turn out to differ depending on the instrument and, for one of the instruments, to be sensitive to assumptions needed to identify Medicaid’s effects. Second, I make use of the SIPP data employed by Gruber and Yelowitz themselves, and examine the sensitivity of their conclusions to omitted factors that may be related to both Medicaid eligibility and to wealth accumulation. While more robust than the results using the NLSY79, the SIPP estimates are found to depend both on the sample used and on certain specification restrictions. Taken together, the results suggest caution in making inferences about the impact of Medicaid on wealth.

Suggested Citation

  • Gittleman Maury, 2011. "Medicaid and Wealth: A Re-Examination," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-25, November.
  • Handle: RePEc:bpj:bejeap:v:11:y:2011:i:1:n:69
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    References listed on IDEAS

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    1. Aigner, Dennis J., 1973. "Regression with a binary independent variable subject to errors of observation," Journal of Econometrics, Elsevier, vol. 1(1), pages 49-59, March.
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    3. Rendon, Silvio, 2007. "Does Wealth Explain BlackWhite Differences in Early Employment Careers?," Journal of Business & Economic Statistics, American Statistical Association, vol. 25, pages 484-500, October.
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    5. James P. Ziliak, 2003. "Income Transfers and Assets of the Poor," The Review of Economics and Statistics, MIT Press, vol. 85(1), pages 63-76, February.
    6. Jonathan Gruber & Aaron Yelowitz, 1999. "Public Health Insurance and Private Savings," Journal of Political Economy, University of Chicago Press, vol. 107(6), pages 1249-1274, December.
    7. Thomas J. Kane & Cecilia Rouse & Douglas Staiger, 1999. "Estimating Returns to Schooling When Schooling is Misreported," Working Papers 798, Princeton University, Department of Economics, Industrial Relations Section..
    8. David Card & Lara D. Shore-Sheppard, 2004. "Using Discontinuous Eligibility Rules to Identify the Effects of the Federal Medicaid Expansions on Low-Income Children," The Review of Economics and Statistics, MIT Press, vol. 86(3), pages 752-766, August.
    9. Davidson, Russell & MacKinnon, James G., 1993. "Estimation and Inference in Econometrics," OUP Catalogue, Oxford University Press, number 9780195060119.
    10. Alex Maynard & Jiaping Qiu, 2009. "Public insurance and private savings: who is affected and by how much?," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 24(2), pages 282-308, March.
    11. Elizabeth M. Caucutt & Nezih Guner & John Knowles, 2001. "The Timing of Births: A Marriage Market Analysis," Penn CARESS Working Papers 49355d43c11f2314075e8b54e, Penn Economics Department.
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    Cited by:

    1. Marianne P. Bitler & Madeline Zavodny, 2014. "Medicaid: A Review of the Literature," NBER Working Papers 20169, National Bureau of Economic Research, Inc.
    2. Sang-Wook (Stanley) Cho & Renuka Sane, 2014. "Means-tested Age-Pension and Saving," Discussion Papers 2014-03, School of Economics, The University of New South Wales.
    3. repec:mrr:papers:wp341 is not listed on IDEAS

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