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The Effects of Medicaid Earnings Limits on Earnings Growth among Poor Workers

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  • Hamersma Sarah

    (Syracuse University, Syracuse, NY, USA)

Abstract
Strict earnings limits for public health insurance eligibility may distort work incentives for low-earning workers. Since 1996, states may vary their parental Medicaid eligibility criteria independently of other assistance programs. The result is substantial variation across states and over time in the earnings thresholds to which workers must adhere to maintain eligibility. Utilizing this variation, I identify the effects of Medicaid earnings thresholds on labor force behavior of low-income single mothers, examining both static and dynamic patterns. I find some evidence that allocating government funds to increasing these thresholds could be used as a policy lever to help drive increased earnings among low-income women.

Suggested Citation

  • Hamersma Sarah, 2013. "The Effects of Medicaid Earnings Limits on Earnings Growth among Poor Workers," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 13(2), pages 887-919, August.
    • Handle: RePEc:bpj:bejeap:v:13:y:2013:i:2:p:887-919:n:10
    DOI: 10.1515/bejeap-2012-0048
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    References listed on IDEAS

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    1. John C. Ham & Lara D. Shore-Sheppard, 2005. "Did Expanding Medicaid Affect Welfare Participation?," ILR Review, Cornell University, ILR School, vol. 58(3), pages 452-470, April.
    2. Mickey Hepner & W. Robert Reed, 2004. "The Effect of Welfare on Work and Marriage: A View from the States," Cato Journal, Cato Journal, Cato Institute, vol. 24(3), pages 349-370, Fall.
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    5. Aaron S. Yelowitz, 1995. "The Medicaid Notch, Labor Supply, and Welfare Participation: Evidence from Eligibility Expansions," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(4), pages 909-939.
    6. Brunello, Giorgio & Comi, Simona, 2004. "Education and earnings growth: evidence from 11 European countries," Economics of Education Review, Elsevier, vol. 23(1), pages 75-83, February.
    7. Emmanuel Saez, 2002. "Optimal Income Transfer Programs: Intensive versus Extensive Labor Supply Responses," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(3), pages 1039-1073.
    8. Hamersma, Sarah & Kim, Matthew, 2013. "Participation and crowd out: Assessing the effects of parental Medicaid expansions," Journal of Health Economics, Elsevier, vol. 32(1), pages 160-171.
    9. Wheeler, Christopher H., 2006. "Cities and the growth of wages among young workers: Evidence from the NLSY," Journal of Urban Economics, Elsevier, vol. 60(2), pages 162-184, September.
    10. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    11. 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.
    12. Steven J. Haider & David S. Loughran, 2008. "The Effect of the Social Security Earnings Test on Male Labor Supply: New Evidence from Survey and Administrative Data," Journal of Human Resources, University of Wisconsin Press, vol. 43(1).
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Sarah Hamersma & Yilin Hou & Yusun Kim & Douglas Wolf, 2018. "Business Cycles, Medicaid Generosity, and Birth Outcomes," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 37(5), pages 729-749, October.
    2. Guldi, Melanie & Hamersma, Sarah, 2023. "The effects of pregnancy-related Medicaid expansions on maternal, infant, and child health," Journal of Health Economics, Elsevier, vol. 87(C).
    3. Laura Dague & Thomas DeLeire & Lindsey Leininger, 2017. "The Effect of Public Insurance Coverage for Childless Adults on Labor Supply," American Economic Journal: Economic Policy, American Economic Association, vol. 9(2), pages 124-154, May.
    4. Cathy J. Bradley & Lindsay M. Sabik, 2019. "Medicaid expansions and labor supply among low-income childless adults: evidence from 2000 to 2013," International Journal of Health Economics and Management, Springer, vol. 19(3), pages 235-272, December.
    5. repec:mrr:papers:wp341 is not listed on IDEAS
    6. Thomas G. Koch, 2015. "All Internal in the Family?: Measuring Spillovers from Public Health Insurance," Journal of Human Resources, University of Wisconsin Press, vol. 50(4), pages 959-979.
    7. Hamersma, Sarah & Kim, Matthew, 2013. "Participation and crowd out: Assessing the effects of parental Medicaid expansions," Journal of Health Economics, Elsevier, vol. 32(1), pages 160-171.
    8. Johanna Catherine Maclean & Ioana Popovici & Elisheva Stern, 2015. "Health Insurance Expansions and Provider Behavior: Evidence from Substance Use Disorder Providers," DETU Working Papers 1510, Department of Economics, Temple University.
    9. Boyle, Melissa A. & Lahey, Joanna N., 2016. "Spousal labor market effects from government health insurance: Evidence from a veterans affairs expansion," Journal of Health Economics, Elsevier, vol. 45(C), pages 63-76.
    10. Hamersma, Sarah & Kim, Matthew, 2009. "The effect of parental Medicaid expansions on job mobility," Journal of Health Economics, Elsevier, vol. 28(4), pages 761-770, July.
    11. R. Vincent Pohl, 2018. "Medicaid And The Labor Supply Of Single Mothers: Implications For Health Care Reform," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 59(3), pages 1283-1313, August.
    12. Sarah Hamersma & Burcin Unel, 2017. "Wearing Out Your Welcome: Examining Differential Medicaid Eligibility Of New Entrants And Continuing Recipients," Contemporary Economic Policy, Western Economic Association International, vol. 35(3), pages 457-471, July.
    13. Sarah Hamersma & Matthew Kim & Brenden Timpe, 2019. "The Effect Of Parental Medicaid Expansions On Children'S Health Insurance Coverage," Contemporary Economic Policy, Western Economic Association International, vol. 37(2), pages 297-311, April.
    14. Thomas Buchmueller & John C. Ham & Lara D. Shore-Sheppard, 2015. "The Medicaid Program," NBER Chapters, in: Economics of Means-Tested Transfer Programs in the United States, Volume 1, pages 21-136, National Bureau of Economic Research, Inc.

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    More about this item

    Keywords

    Medicaid; earnings; earnings growth; hours of work;
    All these keywords.

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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