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The Effect of Medicaid Expansions in the Late 1980s and Early 1990s on the Labor Supply of Pregnant Women

  • Dhaval M. Dave
  • Sandra L. Decker
  • Robert Kaestner
  • Kosali Ilayperuma Simon

A substantial body of research has found that expansions in Medicaid eligibility increased enrollment in Medicaid, reduced the rate of uninsured, and reduced the rate of private health insurance coverage (i.e., crowd out). Notably, there has been little research that has examined the mechanism by which crowd-out occurs. This study examines the effects of expansions in Medicaid eligibility for pregnant women in the late 1980s and the early 1990s on labor supply, which is one of the possible mechanisms underlying crowd out. Estimates suggest that the 20 percentage point increase in Medicaid eligibility during the sample period was associated with a 6% to 7% decrease in the probability that a woman who gave birth in the past year was employed. Among unmarried women with less than a high school education, the change in Medicaid eligibility reduced employment by approximately 13% to 16%.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 19161.

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Date of creation: Jun 2013
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Publication status: published as Dhaval Dave & Sandra L. Decker & Robert Kaestner & Kosali I. Simon, 2015. "The Effect of Medicaid Expansions in the Late 1980s and Early 1990s on the Labor Supply of Pregnant Women," American Journal of Health Economics, MIT Press, vol. 1(2), pages 165-193, Spring.
Handle: RePEc:nbr:nberwo:19161
Note: CH HC HE LS PE
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  1. 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.
  2. Sonalde Desai & P. Chase-Lansdale & Robert Michael, 1989. "Mother or Market? Effects of Maternal Employment on the Intellectual Ability of 4-Year-Old Children," Demography, Springer;Population Association of America (PAA), vol. 26(4), pages 545-561, November.
  3. Aaron Yelowitz, 1995. "The Medicaid Notch, Labor Supply and Welfare Participation: Evidence from Eligibility Expansions," UCLA Economics Working Papers 738, UCLA Department of Economics.
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  5. Currie, Janet & Gruber, Jonathan, 1996. "Saving Babies: The Efficacy and Cost of Recent Changes in the Medicaid Eligibility of Pregnant Women," Journal of Political Economy, University of Chicago Press, vol. 104(6), pages 1263-96, December.
  6. Jerry Hausman, 2001. "Mismeasured Variables in Econometric Analysis: Problems from the Right and Problems from the Left," Journal of Economic Perspectives, American Economic Association, vol. 15(4), pages 57-67, Fall.
  7. Anthony T. LoSasso & Thomas C. Buchmueller, 2002. "The Effect of the State Children's Health Insurance Program on Health Insurance Coverage," NBER Working Papers 9405, National Bureau of Economic Research, Inc.
  8. Bruce D. Meyer & Dan T. Rosenbaum, 2001. "Welfare, the Earned Income Tax Credit, and the Labor Supply of Single Mothers," The Quarterly Journal of Economics, Oxford University Press, vol. 116(3), pages 1063-1114.
  9. Katherine Baicker & Amy Finkelstein & Jae Song & Sarah Taubman, 2014. "The Impact of Medicaid on Labor Market Activity and Program Participation: Evidence from the Oregon Health Insurance Experiment," American Economic Review, American Economic Association, vol. 104(5), pages 322-28, May.
  10. Moffitt, Robert & Wolfe, Barbara L, 1992. "The Effect of the Medicaid Program on Welfare Participation and Labor Supply," The Review of Economics and Statistics, MIT Press, vol. 74(4), pages 615-26, November.
  11. Shore-Sheppard Lara D., 2008. "Stemming the Tide? The Effect of Expanding Medicaid Eligibility On Health Insurance Coverage," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 8(2), pages 1-35, July.
  12. David M. Cutler & Jonathan Gruber, 1996. "Does Public Insurance Crowd out Private Insurance?," The Quarterly Journal of Economics, Oxford University Press, vol. 111(2), pages 391-430.
  13. Lara D. Shore-Sheppard & John C. Ham, 2003. "The Effect of Medicaid Expansions for Low-Income Children on Medicaid Participation and Private Insurance Coverage : Evidence from the SIPP," Department of Economics Working Papers 2003-10, Department of Economics, Williams College.
  14. Michiel Evers & Ruud Mooij & Daniel Vuuren, 2008. "The Wage Elasticity of Labour Supply: A Synthesis of Empirical Estimates," De Economist, Springer, vol. 156(1), pages 25-43, March.
  15. Lara D. Shore-Sheppard, 2005. "Stemming the Tide? The Effect of Expanding Medicaid Eligibility on Health Insurance," NBER Working Papers 11091, National Bureau of Economic Research, Inc.
  16. Sandra Decker & Frederic Selck, 2012. "The effect of the original introduction of Medicaid on welfare participation and female labor supply," Review of Economics of the Household, Springer, vol. 10(4), pages 541-556, December.
  17. Erin Strumpf, 2010. "Employer-sponsored health insurance for early retirees: impacts on retirement, health, and health care," International Journal of Health Economics and Management, Springer, vol. 10(2), pages 105-147, June.
  18. Montgomery, Edward & Navin, John C, 2000. "Cross-State Variation in Medicaid Programs and Female Labor Supply," Economic Inquiry, Western Economic Association International, vol. 38(3), pages 402-18, July.
  19. Shore-Sheppard, Lara & Buchmueller, Thomas C. & Jensen, Gail A., 2000. "Medicaid and crowding out of private insurance: a re-examination using firm level data," Journal of Health Economics, Elsevier, vol. 19(1), pages 61-91, January.
  20. Vincent Pohl, 2014. "Medicaid and the Labor Supply of Single Mothers: Implications for Health Care Reform," Upjohn Working Papers and Journal Articles 15-222, W.E. Upjohn Institute for Employment Research.
  21. Gruber, Jonathan & Simon, Kosali, 2008. "Crowd-out 10 years later: Have recent public insurance expansions crowded out private health insurance?," Journal of Health Economics, Elsevier, vol. 27(2), pages 201-217, March.
  22. Moulton, Brent R, 1990. "An Illustration of a Pitfall in Estimating the Effects of Aggregate Variables on Micro Unit," The Review of Economics and Statistics, MIT Press, vol. 72(2), pages 334-38, May.
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