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Intergenerational health effects of Medicaid

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  • Noghanibehambari, Hamid

Abstract

This paper investigates the effects of the introduction of Medicaid during the 1960s on next generations’ birth outcomes. A federal mandate that all states must widen the coverage to all cash welfare recipients generated cross-state variations in Medicaid eligibility, specifically among nonwhites who largely overrepresented the target population. I implement a reduced-form difference-in-differences strategy that compares the birth outcomes of mothers born in states with higher cash welfare recipiency versus low welfare recipiency and different years relative to the Medicaid implementation year. Using Natality data (1970–2004), I find that Medicaid significantly improves birth outcomes. The effects are considerably larger among nonwhites, specifically blacks. The effects do not appear to be driven by preexisting trends in birth outcomes, preexisting trends in households’ socioeconomic characteristics, changes in other welfare expenditures, and selective fertility. A back-of-an-envelope calculation points to a minimum of 3.9% social externality of Medicaid through income rises due to next generations’ improvements in birth outcomes.

Suggested Citation

  • Noghanibehambari, Hamid, 2022. "Intergenerational health effects of Medicaid," Economics & Human Biology, Elsevier, vol. 45(C).
  • Handle: RePEc:eee:ehbiol:v:45:y:2022:i:c:s1570677x22000107
    DOI: 10.1016/j.ehb.2022.101114
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    More about this item

    Keywords

    Birth Outcomes; Medicaid; Intergenerational Transmission; Health; Externality; Health Insurance; Fertility; Income; Social Insurance;
    All these keywords.

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth

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