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The Long-Run Effects of Childhood Insurance Coverage: Medicaid Implementation, Adult Health, and Labor Market Outcomes

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  • Andrew Goodman-Bacon

Abstract

This paper exploits the original introduction of Medicaid (1966-1970) and the federal mandate that states cover all cash welfare recipients to estimate the effect of childhood Medicaid eligibility on adult health, labor supply, program participation, and income. Cohorts born closer to Medicaid implementation and in states with higher pre-existing welfare-based eligibility accumulated more Medicaid eligibility in childhood but did not differ on a range of other health, socioeconomic, and policy characteristics. Early childhood Medicaid eligibility reduces mortality and disability and, for whites, increases extensive margin labor supply, and reduces receipt of disability transfer programs and public health insurance up to 50 years later. Total income does not change because earnings replace disability benefits. The government earns a discounted annual return of between 2 and 7 percent on the original cost of childhood coverage for these cohorts, most of which comes from lower cash transfer payments.

Suggested Citation

  • Andrew Goodman-Bacon, 2016. "The Long-Run Effects of Childhood Insurance Coverage: Medicaid Implementation, Adult Health, and Labor Market Outcomes," NBER Working Papers 22899, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:22899
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    References listed on IDEAS

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    Cited by:

    1. Hersch Nicholas, Lauren & Maclean, J. Catherine, 2017. "The Effect of Medical Marijuana Laws on the Labor Supply of Older Adults: Evidence from the Health and Retirement Study," IZA Discussion Papers 10489, Institute of Labor Economics (IZA).
    2. repec:bin:bpeajo:v:49:y:2019:i:2018-01:p:89-150 is not listed on IDEAS
    3. Hilary W. Hoynes & Diane Whitmore Schanzenbach, 2018. "Safety Nets Investments in Children," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 49(1 (Spring), pages 89-150.
    4. Boudreaux, Michel & Lipton, Brandy, 2018. "Medicaid Benefit Generosity and Labor Market Outcomes: Evidence from Medicaid Adult Vision Benefits," MPRA Paper 83916, University Library of Munich, Germany.

    More about this item

    JEL classification:

    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General
    • N32 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - U.S.; Canada: 1913-

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