Medicaid and the Labor Supply of Single Mothers: Implications for Health Care Reform

Pohl, R. Vincent. 2018. “Medicaid and the Labor Supply of Single Mothers: Implications for Health Care Reform.” International Economic Review 59(3): 1283–1313.

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Abstract: The Medicaid expansions and health insurance subsidies of the Affordable Care Act (ACA) change work incentives for single mothers. To evaluate the employment effects of these policies ex ante, I estimate a model of labor supply and health insurance choice exploiting variation in pre-ACA Medicaid policies. Simulations show that single mothers increase their labor supply at the extensive and intensive margin by 12% and 7%, respectively, uninsurance rates decline by up to 40%, and an average family’s welfare improves by 1,600 dollars per year. Health insurance subsidies and not Medicaid expansions mostly drive these effects.

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