Did Expanding Medicaid Affect Welfare Participation?

John Ham and Lara Shore-Sheppard

No 9803, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Using data from the 1988-1996 Current Population Surveys (CPS), we re-examine the evidence presented in Yelowitz (1995) showing that expansions in Medicaid eligibility for children were associated with increased labor force participation and reduced participation in Aid to Families with Dependent Children (AFDC) among single mothers. We find that Yelowitz's results were the result of two factors. First, he imposed a strong restriction on the parameter estimates that is not predicted by theory and is rejected in the CPS data. Second, he used only one of the two income tests that families must pass to be eligible for AFDC, resulting in higher imputed AFDC breakeven income levels for larger families. Once these problems are addressed, the Medicaid income limits have no significant effect on AFDC participation. The AFDC income limits, however, are significantly related to welfare and labor force participation in both his original sample and the entire 1988-1996 sample.

JEL-codes: I18 I38 (search for similar items in EconPapers)
Date: 2003-06
New Economics Papers: this item is included in nep-hea
Note: EH CH
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Citations: View citations in EconPapers (4)

Published as John C. Ham & Lara D. Shore-Sheppard, 2005. "Did expanding Medicaid affect welfare participation?," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 58(3), pages 452-470, April.

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Journal Article: Did Expanding Medicaid Affect Welfare Participation? (2005)
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