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

Authors

Vincent Pohl, Queen's University, OntarioFollow

Series

Upjohn Institute working paper ; 15-222

DOI

10.17848/wp15-222

Issue Date

May 27, 2014

Abstract

The Patient Protection and Affordable Care Act expands Medicaid and introduces health insurance subsidies, thereby changing work incentives for single mothers. To undertake an ex ante policy evaluation of the employment effects of the PPACA, I structurally estimate a model of labor supply and health insurance choice exploiting existing variation in Medicaid policies. Simulations show that single mothers increase their labor supply at the extensive and the intensive margin by six and five percent, respectively. The PPACA leads to crowding-out of employer-sponsored health insurance of about 40 percent and increases single mothers' welfare by about $190 per month.

Subject Areas

LABOR MARKET ISSUES; Wages, health insurance and other benefits; Health insurance; UNEMPLOYMENT, DISABILITY, and INCOME SUPPORT PROGRAMS; Poverty and income support; Low wage labor markets