The Medicaid Notch, Labor Supply, and Welfare Participation: Evidence from Eligibility Expansions

Aaron Yelowitz

The Quarterly Journal of Economics, 1995, vol. 110, issue 4, 909-939

Abstract: I assess the impact of losing public health insurance on labor market decisions of women by examining a series of Medicaid eligibility expansions targeted toward young children. These targeted expansions severed the historical tie between AFDC and Medicaid eligibility. The reforms allowed a mother's earnings to increase without losing public health insurance for her young children. Increasing the income limit for Medicaid resulted in a decrease in AFDC participation and an increase in labor force participation among these women. The effects were large for ever married women, and negligible for never married women.

Date: 1995
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