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The Effects of Medicaid Expansion on Labor Market Outcomes: Evidence from Border Counties

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  • Lizhong Peng
  • Xiaohui (Ronnie) Guo
  • Chad D. Meyerhoefer

Abstract

This paper provides new empirical evidence on the employment and earning effects of the recent Medicaid expansion. Unlike most existing studies that use a conventional state and year fixed effects approach, our main identification strategy is based on the comparison of employment and wages in contiguous county-pairs in neighboring states (i.e. border counties) with different Medicaid expansion status. Using the 2008-2016 Quarterly Census of Employment and Wages, we estimate a set of distributed lag models in order to examine the dynamic effects of Medicaid expansion. Results from our preferred specification suggest a small but statistically significant decrease in employment of 1.3 percent one year after the Medicaid expansion. This disemployment effect is transitory and appears to primarily occur in low-wage sectors. In particular, employment returns to pre-expansion levels within two years. We also do not find any statistically significant effect of the Medicaid expansion on wages at any point.

Suggested Citation

  • Lizhong Peng & Xiaohui (Ronnie) Guo & Chad D. Meyerhoefer, 2018. "The Effects of Medicaid Expansion on Labor Market Outcomes: Evidence from Border Counties," NBER Working Papers 25105, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:25105
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    Cited by:

    1. Jingshu Luo & Hua Chen & Martin Grace, 2022. "Medicaid expansion, tort reforms, and medical liability costs," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 89(3), pages 789-821, September.
    2. Florian Gunsilius & Meng Hsuan Hsieh & Myung Jin Lee, 2022. "Tangential Wasserstein Projections," Papers 2207.14727, arXiv.org, revised Aug 2022.
    3. Matt Hampton & Otto Lenhart, 2022. "The effect of the Affordable Care Act Medicaid expansion on marriage," Economic Inquiry, Western Economic Association International, vol. 60(2), pages 568-591, April.
    4. Rajashri Chakrabarti & Maxim Pinkovskiy, 2019. "The Affordable Care Act and the Market for Higher Education," CESifo Working Paper Series 7869, CESifo.

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    More about this item

    JEL classification:

    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General

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